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The requirement is part of the 2010 Dodd-Frank Act’s response to a public uproar over executive compensation levels seen as misaligned. This was most visible in the skewed compensation structures tied to the origination of mortgages in the build-up before the crisis and in the aftermath. A well-publicized example was AIG’s awarding of $165 million in bonuses at a time the firm was receiving a government bailout.
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