Empirical Research On The Remuneration And Incentive Effects Of The Bank’s Senior Management

In the transformation process of Chinese economy, which from closed traditio nal planned economy to opened modern market economy, the problem of Principal-Agent Relation in the corporate governance arises. It has always been a hot issue and a debatable problem to the Chinese Government, the specialists in this field an d others in this society that as a special and important group in China, how does th e Chinese banking industry can successfully adapt to the economic transformation and reduce the agent cost through the way of changing the old idea and system. Executive compensation incentive system is an important aspect of the banking system reform, and one of the main methods to solve the banking sectors’ principal-agent problem. The Chinese Banking has been groping forward so many years that how to develop a scientific and rational, effective executive compensation incentive system.Through the classification of data and comparison analysis, it can be concluded that the pay of the current domestic listed commercial bank executives have the following four characteristics:Joint-stock commercial bank executive pay is higher while the city commercial bank executive pay is too low; There is a big salary gap between the executives and staff; Executive pay is mainly made up by monetary remuneration and long-term incentives share only a small part; The imbalance on executive pay between state-owned banks and joint-stock banks is obvious.Empirical research on the relationship between the bank executive pay and bank performance, we found that there is negative correlation between executive compensation and bank performance while this may seem unreasonable. The result is inextricably linked with factors such as the low transparency and inadequate disclosure about Chinese Banking executive pay, and the depoliticization is not yet completed.