The Imapact Of Board Governance Structure On Executive Compensation Incentive In Listed Bank

As a special and important part of corporate governance, executivecompensation incentive always be the focus of attention by the society.Particularly in the financial sector, the executive compensation always be thefirst position,specially, the chairman Frank.N.Newman had22.85million yuanbeen paid.The “Astronomical remuneration made the society pay high notationto this performance.”. And more researchers begin to study the institutionsabout executive compensation. But the basic research focused on theestablishment of incentive mechanism of executive compensation,and theinfluence factor analysis and other fields.For the executives make mechanism–Board of directors research is still relatively small,and the conclusionof the study is not unity.So this article from the perspective of boardgovernance characteristics, the scale of board of directors,the independentdirector proportion and whether the chairman and President be part-timeposition,to analyze the influence on executive pay and pay-performancesensitivity.Considering the particularity of commercial banks, the article on the basisof commercial bank profitability, safety, liquidity and growth of these fourdimensions of financial indicators, using entropy method to build a commercialbank comprehensive performance measurement model, and calculate thecomprehensive scores of banks, as banks performance variables, instead of thetraditional variables ROA or ROE, which can make the analysis more accurate.Finally, make the executive compensation as the dependent variable, make thescale of board of directors, the proportion of independent directors and whetherthe chairman and President be the part-time position as the independent variables,make the current bank comprehensive performance, the lag phase bankcomprehensive performance, bank scale and the first big shareholder ratio asthe control variables, establishing regression models, make a regressionanalysis of16listed banks’ panel data between2006-2011. The empirical results show that: the board’s scale and the compensation havea significantly positive correlation, and a weak negative correlation withpay-performance sensitivity; independent director proportion and executivecompensation have a weak negative correlation, and a significant positivecorrelation with pay-performance sensitivity; the separation of President andchairman has a significant positive relationship with compensation, has a weakpositive correlation with pay-performance sensitivity. According to the aboveanalysis result, the article puts forwad some suggestions for reference.