What is a limitation on bonuses as mentioned in the context?

The correct answer highlights a specific regulatory requirement regarding bonuses, which is that they must not exceed 10% of the last 12 months of compensation. This guideline ensures that the compensation structure remains in line with industry standards and regulatory expectations, preventing excessive risk-taking behaviors from employees who may be motivated by high bonuses.

Regulating bonuses is important to maintain ethical practices within financial institutions and to promote stability in the lending environment. The 10% cap is particularly relevant for Mortgage Loan Originators, as it helps to align their compensation with sustainable business practices and consumer protection standards.

The other options suggest scenarios that either lack such a regulation or imply flexibility that does not exist within the guidelines. For instance, bonuses restricted to long-term employees or those allowing for higher bonuses for top performers do not align with the specified regulatory framework in this context. Additionally, stating that there are no limitations on bonuses directly contradicts the established regulations that aim to control compensation structures within the mortgage industry.