Research On The Validity Of Compensation Incentives Of Commercial Banks

In recent years, the salary of bank executives has always been a hot topic inpeople’s daily life, especially since the second half of2008, when financial storm spreadto all over the world under the domino effect initiated by sub-prime crisis. Under thecircumstances of financial crisis, a large number of bank executives still get high salary.The imbalance between the growing surge of high salary and the drop of operatingperformance has been increasingly questioned. With the increasingly dissatisfaction ofthe public and government, measures aiming to limit the high salary of bank executiveshas been carried out by authorities from all over the world. In fact, salary restriction isn’tthe real purpose. The key point is whether the level of salary related to the company’sperformance, and whether salary can have an incentive action on the operatingperformance, which is the most concerned issue of investors.This paper combining normative analysis with positive analysis method, describethe development and the current situation of salary motivation in listed banks on thebasis of related theory and previous studies at the beginning of the article. Then thepaper makes use of positive method to test the correlation between salary of bankexecutives and performance indicators of commercial banks, using precise quantitativemeasures to demonstrate the salary incentive mechanism effect in commercial banks ofour country. And the next step is to identify the reasons for the formation of salarymotivation. At last, on the basis of practical experience and reference, the paper makessome policy recommendations for salary motivation of executives in listed banks ofChina.