The Empirical Analysis Of Listed Commercial Banks In Hong Kong And Mainland

The study examines how 12 listed Hong Kong banks and mainland banks compensated their executive directors and staffs. Two differences are emphasized in the study: area difference and bank-size difference. The pay performance of executive directors' is different between Hong Kong and mainland banks. The pay to executive directors in Hong Kong banks is more sensible with earning related factors, while the pay in mainland banks shows more risk averse sensibility. The intercept of staff pay performance regression model of mainland banks is smaller than that of Hong Kong banks even though the two models have similar components. The executive directors' pay elasticity of Hong Kong and mainland banks is also different. The former is larger than the latter. Besides that, the banks size affects the pay structures, pay performance, pay elasticity of directors' and staff pay performance in Hong Kong banks. The conclusion of this study is consistent with agency theory and several labor economics theory. This study also extends some previous research of pay performance in Chinese commercial banks.