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"I believe the structure of compensation is flawed," Mr. Frank said.
The Federal Reserve's examination is focusing on the structure of compensation arrangements, not their amounts, and the results have not been made public.
But the firms often focus on the structure of compensation and how tied it is to performance, not the absolute amount.
Walker responded by saying he was sympathetic to the view that some City bonuses were "egregiously high", but stressed it was not so much the level of pay but the structure of compensation that was the problem.
More recently, rules have made companies detail the size and the structure of compensation packages and have enforced transparency about the kinds of comparisons they rely on to determine salaries.
Because employee costs represent such a large portion of total costs, even small changes in the level and structure of compensation can have a major impact on the level of profits.
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Structures of compensation affect the end product, especially when salaries or bonuses are tied to the pursuit of traffic, a model that many online start-ups follow.
JPMorgan Chase has still not disclosed the structure of its compensation arrangements in its London office, but the likelihood is that compensation must have been in line with standard proprietary trading compensation.
But the structure of the compensation requested by Mr. Schleyer and Mr. Cooper is also remarkable in several ways, according to Brian Foley, a compensation consultant based in White Plains.
Still another consideration is the structure of executive compensation.
The fact is, because of the structure of their compensation, CEOs are rewarded for share price volatility not performance.
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