An Empirical Study On Endogeneity Of Executive Compensation Incentive In Listed Commercial Bank Of China

As the corporate governance of the important and special part of the executive incentive pay has an important influence on company performance, has been subjected to widespread community concern. Especially the financial crisis, financial industry executives pay high price high frequency, its operating results seriously decoupling, raises the strong current challenge executive pay and incentives controversy. At the same time, executives and staff of the gap between the increasing income levels, people have the fairness of executive pay incentives once white-hot controversy. However, the current incentive for the relevant conclusions of executive compensation is still great uncertainty, it is difficult to answer a variety of incentive pay for executives doubt that even had strong incentive effects of executive compensation proud proud of Wall Street, this could not escape the subprime crisis disaster. Therefore, research on executive pay incentives and guidance with some practical significance. At present, the studies are mostly from the exogenous perspective of executive compensation for banks or bank performance results on executive pay, one-way relationship. According to relevant research findings, corporate governance and company performance significantly between endogenous. But still remain in academia, holding senior management, ownership structure of the endogenous variables of governance, and executive pay little attention to the endogeneity problem. But executive pay is a core part of corporate governance, internal and external governance mechanisms and corporate performance affect each other at the same time, between executive pay and company performance will affect each other. Therefore, ignoring the endogeneity of the interference, the accuracy of their conclusions questionable. View of this, the perspective from the endogenous to 2001-2010 14 listed banks in Shanghai and Shenzhen stock data for the study sample, the use of simultaneous equations models on bank executive pay and bank performance are empirically tested and analyzed bank executive pay and the interaction between bank performance. This relatively new perspective to explore the bank executive compensation issues and draw relevant conclusions incentive for future research and policy development related to a certain reference value.