WASHINGTON - Banks could eventually face higher fees for risky compensation plans under a proposal approved by regulators Tuesday, as policymakers continue to wrestle with public outrage over the pay culture of the financial services industry.

The Federal Deposit Insurance Corp.'s five-member board voted 3-2 in favor of a preliminary staff proposal that would use the deposit insurance fees banks pay the government as both a carrot and stick to encourage less risky pay practices. The goal, the proposal says, is to "provide incentives for institutions to adopt compensation programs that align employees' interests with those of the firm's stakeholders, including the FDIC."

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