The Australian Prudential Regulation Authority proposed a ban on the hedging of equity exposures by the executives of banks and general insurance companies to avoid executives taking excessive risks towards the end of their employment.The banking and financial regulator said executive remuneration at regulated institutions should instead be aligned with the company's financial soundness.APRA said its principles-based proposals dealt with a lack of alignment between remuneration and risk management in many financial institutions.The proposals are contained in a consultation paper released on Thursday, in response to the global push for tougher principles on pay and compensation for financial sector institution executives.The remuneration issue came under the global political and community spotlight after some top banking executives in the US and UK received large payouts after their institutions accepted government bailouts or were nationalised in the wake of the global financial crisis."APRA has not addressed the absolute level of remuneration, but the need to align remuneration incentives with good stewardship of institutions," APRA executive member John Trowbridge said in a statement.APRA said so-called "golden parachute" deals, under which executives receive often large termination payouts, were generally at odds with prudent practice and may expose the regulated institution to considerable risk.APRA also proposes the remuneration policy be extended beyond senior executives to all employees who have the capacity to make decisions that can affect the interests of deposit holders, policyholders and owners.