The past few weeks have revealed a shocking level of outright consumer fraud at Wells Fargo, involving the opening of millions of fraudulent customer accounts. Yet perhaps the most shocking aspect of this story is that no executive under whose watch it occurred has been forced to return any compensation.

While over 5,000 front line, mostly customer service employees have been fired, former consumer banking chief Carrie Tolstedt, who oversaw their work, recently retired with a $125 million compensation package. It is unclear if Wells Fargo plans to take back any of this pay package. There is similarly no clear indication that Wells Fargo CEO John Stumpf will have to return any of the almost $100 million in bonus pay he received for the years in which the violations were occurring.

This is just the latest example of the lack of executive accountability for illegal activity at major banks. Although tens of billions in penalties have been levied at big banks for mortgage fraud and other illegal activities during the financial crisis, there is no evidence that key executives have ever had to pay back bonuses connected to these activities.

Common sense tells us that top executive accountability is crucial to changing bank culture and preventing further abuses. Yet our current system of regulatory and legal oversight seems to be terrible at achieving it.

But regulators now have an excellent opportunity to change that. The bank regulatory agencies are currently implementing a mandate in Section 956 of the Dodd-Frank Act to reform incentive-based bonus compensation at financial firms. The current rule, still in the proposal stage, offers a potential tool that could make top executives routinely far more accountable for misconduct – if regulators are willing to use it.

The Dodd-Frank mandate requires regulators to ban forms of incentive compensation that induce inappropriate risk-taking. In order to implement the mandate, agencies have proposed that a share of bonus compensation be deferred for several years prior to vesting, and that employment contracts contain a clawback provision that permits vested pay to be recovered for up to seven years.

Strong pay deferral and clawback requirements could ensure that top executive pay was at risk each and every time a new case of big bank misconduct is revealed. Unfortunately, the rule as currently proposed is too weak to ensure executive accountability.

The deferral requirement in the proposal permits even the top executives at the largest banks to receive 70% of their bonus pay within two years after the performance year, 85% within three years, and all of it within four years. But it often takes more than four years for the full scope of wrongdoing to be apparent. Wells Fargo has been opening fraudulent accounts since at least 2011, and financial crisis penalties were not levied until almost a decade after the fraudulent activities occurred. So it's likely that most executive bonuses will have vested before investigations are complete and penalties are levied. In the final proposal, deferral periods need to be long enough to make a real difference.

The problem is made significantly worse by the fact that clawback requirements are also far too weak.

First, the proposal makes clawbacks entirely discretionary on the part of the company. Even in cases of serious mismanagement costing the company billions in direct and reputational losses, there is no obligation for the company to protect shareholders by recovering executive bonuses connected to the activity. That leaves the door open for bank boards to protect high-ranking insiders by declining to claw back their bonuses.

Second, the circumstances that trigger clawbacks for executives are limited to individual misconduct. Mismanagement, failures in supervision, and negligence in employee oversight or risk management are not covered. So even if companies do pursue executive clawbacks, which they are under no obligation to do, they would frequently be unable to reach high-level executives and supervisors.

These shortcomings could easily be addressed in the regulators' final rule. Expanding the period of deferral would mean that a significant share of executive bonuses would not be received until wrongdoing has come to light. Clawback provisions must also be strengthened to mandate that companies exercise them in cases of serious misconduct, and to ensure that failures in supervisory oversight and risk management are clearly covered.

Regulators already have a model rule to draw on in order to make these needed changes. As Americans for Financial Reform points out in our comment letter on the proposal, the compensation rule put in place by the United Kingdom's Prudential Regulatory Authority is superior to the U.S. proposal in all of these areas. The effective length of bonus pay deferral for top executives is far longer than the U.S. proposal, with bonuses paid over a seven-year period and no payment of deferred bonuses before the third year – a point at which U.S. managers would already have received 85% of their bonus.

Clawback provisions in the U.K. rule are much stronger as well, with companies required to pursue recovery of bonus pay in all cases where there is reasonable evidence of employee misbehavior or failures of risk management. The reach of the clawback provision also extends to all managers who share responsibility for the failure of risk management. The U.K. PRA proposal also has other strengths which will make it harder for managers to evade accountability.

U.S. banks, including Wells Fargo, have already been complaining about being subject to even the excessively weak proposed compensation rules. But the truth is that if U.S. regulators don't strengthen their compensation proposal, then they will have failed to ensure top executive accountability for bank wrongdoing. In that case, we can expect to see more cases of top executives taking hundreds of millions in bonuses even when severe management failures occur.

If U.S. regulators simply align their proposal with the rules already finalized in the U.K., they would have a powerful tool for automatically creating executive accountability in cases of significant wrongdoing such as occurred at Wells Fargo.

Marcus Stanley is the policy director for Americans for Financial Reform