Pay Bankers More in Fixed Income: Krawcheck

The structure of compensation needs to change at banks, and paying bankers in fixed income securities may be one day to reduce risk, Sallie Krawcheck, former president of Bank of America Merrill Lynch's Global Wealth Management, told CNBC’s “Squawk Box” on Friday.

“The compensation discussion we've had as a nation has been on taking compensation down,” she said. “I've done some work and some thinking on the structure which is we pay people in equity.” Krawcheck added equity is “a risk-absorbing, risk-tolerant instrument.”

She added, "I've proposed paying folks more in fixed income which is a more of a risk-averting structure,” she said. (Related: America's Highest Paying Jobs 2012).

Compensation is only one way to help reduce risks at the banks, Krawcheck said. “I know this topic drives people nuts, but every bit of research out there shows that diversity of thought and opinion leads to lower risk,” she stated.