Research Of Chinese Commercial Bank Executive Incentive Merchant

Commercial bank usually be analyzed as a tool in the traditional research of corporate government, but nowadays commercial bank has become a nature enterprise with the global economics and the development of the finance, and commercial bank corporate government has been a focus of the research, executive incentive, an important part of the corporate government also become a focus. The traditional agent theory used to analyze the relationship between ownership and control power to explain the agent relation. It point the important of agent cost, but it can not explain why property right reformation invalidation in improve the corporate performance. Beyond-property theory analyze the relationship between compete and incentive, and point that only under sufficient compete can incentive be effective and improve the corporate performance.This paper based on beyond-property theory, analyze the factors which effect the Chinese commercial banks manager's compensation, then introduced the compete factor into the Mirrlees-Holmstrom Approach, analyze the effect of the compete factor to realize the incentive available. Based on the approach analyze, set up an econometric model. This paper based on database of 14 Chinese commercial banks from 2000 to 2006, uses principal component analysis and econometric measure. The conclusion is the commercial bank executive incentive is made up of three parts, one is annual compensation, another is long-term incentive, and the last is residual control right. Compensation is made up of basal annual salary and annual bonus. You can set an annual bonus standard or a bonus coefficient, the factors which can influence the coefficient include profitability, and liquidity, and the risk of the bank manage. And the stock increment property can be a good long term incentive for commercial bank.Above all, incentive mechanism only a measure to strengthen the incentive, we also need to improve the competition between commercial banks and improve the manager market to use compete to made the incentive be availability.