Within The Executive Team Pay Gap Between Ownership Concentration And Performance

Accompanied by economic globalization and China’s financial system isconstantly opening up the banking sector as an important part of our financial systemto face the fierce competition is not difficult to imagine. Therefore, enhancing thecompetitiveness of China’s banking industry is particularly important. How toimprove the governance situation of the banks, to improve the performance of thebanking sector, which has always been the focus of academic research.First of all: the salary is not only the reward for labor can be used as an incentivedevice to use. How to effectively utilize the salary means the senior managementincentive is a very important issue in the modern theory of the firm, performanceincentives to the core of the executive incentive. Understanding of the status quo ofChina’s enterprise incentive, found that the existing problems, both thought toimprove the corporate governance measures to provide a reference, but also provide abasis for policy control.Second: the equity structure of the irrational corporate structure governanceimpossible and effective business management decisions will not be able to achievethe democratization of scientific, authoritarian and internal control is inevitable, andeven become the opening of enterprise property rights reform and economicrestructuring deepening the biggest obstacle.Again: learning related literature on the basis of China’s banking industryperformance as a starting point, mandatory disclosure of executive remuneration inlisted companies as the background, combined with the company ownershipconcentration, the use of the15listed companies in China’s Shanghai and Shenzhenbanking industry2006~2010Annual Report data, empirical analysis of the bankingsector performance pay gap of the impact of ownership concentration and within theexecutive team, ownership concentration and banking sector performance.Finally:The study found that the concentration of the banking sector performanceand its equity to a negative correlation; pay gap and bank performance, tournamenttheory and behavior theory diametrically opposed views. Our results show that these two theories: within the executive team pay gap has a positive impact on the bankingsector performance, in line with the expectations of tournament theory, which alsopay for the executives within the team system design Policy Implications.