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Washington, D.C., Of Counsel Michael Oxley, New York partner George Stamboulidis, head of the firm&#39;s White Collar Defense and Corporate Investigations practice group, and New York associate James Pfeffer, co-authored an article which appeared in the December 13 edition of the New York Law Journal and was posted on Law.com.  According to the article, "A Best-Practices Proposal for Compliance Officers," while an incentive-based compensation models is "common, and often succeeds in creating welcome incentives for a company&#39;s managers, it can create dangerous temptations for a business&#39; compliance workers—those specialists tasked not with maximizing earnings, but rather ensuring that a company &#39;complies&#39; with laws and regulations—even if the result is occasionally a reduction in short-term corporate profits."  Oxley, Stamboulidis and Pfeffer continue: "In an increasingly regulatory-driven world, the compliance officer must ask many questions, but &#39;how will the market view this deal,&#39; is not one of them. Of course that is a legitimate question to ask, but it is not her query. And too often, paying compliance officers in equity-based awards (e.g., stock options, etc.), which usually depend for value on the company&#39;s financial performance, tempts these executives to approve a deal that they should refuse."  The authors suggest a different approach: "Our overarching goal is to commence a dialogue that addresses how to devise a compensation system free from critical (and unnecessary) conflicts of interest. In particular, we offer . . . a strategy that companies can follow to avoid salary and bonus plans that might actually prompt compliance watchdogs to &#39;under regulate&#39; the very business units that they are supposed to monitor."  Oxley, Stamboulidis and Pfeffer conclude: "If stock is necessary to do this [reward and retain employees]—in those cases where a company genuinely cannot afford to pay an attractive salary and benefit package—a company might choose to provide stock, ownership of which would vest over a period of time (such as three to five years). Companies might also impose &#39;claw backs&#39; on equity awards to compliance officers who approve deals that time eventually reveals as violating various criteria."

New York Law Journal: A Best-Practices Proposal for Compliance Officers

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