WASHINGTON — Federal regulators unveiled a long-awaited proposal Thursday designed to target incentive-based pay arrangements for executives at banks and credit unions, the agencies' second attempt after their initial plan met fierce resistance.

The new proposal, unveiled by the National Credit Union Administration, sets out a tiered approach to executive compensation rules based on total assets.

Financial institutions with $250 billion or more in assets are considered Level 1 and subject to the highest standards; those with between $50 billion and $250 billion are in Level 2 and face moderate requirements; and those with assets of $1 billion to $50 billion are in Level 3 and face fewer mandates.

Under the plan, senior executives at the largest banks would have to defer at least 60% of their qualifying incentive-based compensation for each performance period for four years, while significant risk-taker for those Level 1 institutions must defer 50% of their incentive-based pay.

Midsize large institutions, those considered Level 2, must defer the incentive-based pay of top executives by at least 50% for three years, while risk-takers defer 40% of incentive-based pay for that time period.

The proposal would allow regulators the discretion to require Level 3 banks and credit unions to be subject to either of the restrictions for Level 1 or 2 institutions depending on the "complexity of operations or compensation practices."

The proposal defines senior executive as a person who either holds the title or performs the functions of a president or chief executive officer, chief operating and financial officers, chief lending officers, chief risk and/or compliance officers, among others.

Significant risk-takers are defined as individuals receiving at least one-third incentive-based compensation and, for Level 1 institutions, are among the top 5% compensated individuals at the firm, and for Level 2 institutions among the top 2%. Any individual who may commit or expose at least 0.5% of an institution's assets or who is specifically designated by regulators would also be covered as a significant risk-taker.

The proposal effectively exempts institutions with less than $1 billion of assets from regulation; nor does it require disclosure of compensation that is not incentive-based.

Regulators also proposed requirements for "clawbacks" on executive pay. Under the plan, senior executives at Level 1 and 2 institutions can see their bonus pay reclaimed up to seven years after any new compensation agreement if their actions hurt the firm.

Covered institutions would be able to reclaim compensation in the event of "misconduct that resulted in significant or reputational harm" to the institution, fraud, or intentional misrepresentation of information to determine the executive or risk-taker's compensation, the proposal said.

The plan would also bar Level 1 and 2 institutions from hedging any decrease in the value of a covered person's incentive-based compensation and bans those institutions from awarding an executive more than 125% of the compensation agreement's target amount and 150% for a risk-taker's incentive-based compensation.

The plan would generally prohibit incentive-based arrangements that "would encourage inappropriate risks by providing excessive compensation or that could lead to material financial loss."

The proposal would also require all covered institutions to develop and retain for seven years "records documenting the structure of incentive-based compensation arrangements" and ensure oversight "of the institution's incentive-based compensation arrangements from its board of directors."

The proposal is a multiagency regulation spanning the NCUA, the Federal Reserve, the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency, the Securities and Exchange Commission and the Federal Housing Finance Agency.

The other agencies have not yet announced when they will vote to release the proposal, and the NCUA included a disclaimer in its documents noting that it will not be published in the Federal Register until the remaining agencies have also acted and that "the final version may differ from the version posted here."

The plan is among the highest-profile regulations left unfinished since the passage of the Dodd-Frank Act, and President Obama himself expressed the pressing need for it to be completed in a joint meeting with regulators held at the White House in March.

Executive compensation was one of the leading sources of public resentment after the financial crisis when it was revealed that executives and their underlings were in effect given an incentive to take excessive risks without any appropriate attention paid to financial stability of the firms for which they worked or the system in general.

Since the crisis, other sections of the law have been completed, including a so-called "say on pay" rule by the SEC that requires shareholder disclosure of executive compensation packages and the widespread adoption of "clawbacks" in packages, whereby the board of a firm can take back compensation later if it is revealed to have been awarded based on fraudulent or misleading performance.

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