The Study On Executives Of China’s Listed Bank Incentive Compensation Mechanism

During the past10years,China’s commercial banks have taken fundamental reform in thecorporate governance,developing strategy,opetation ideal by introducing into strategic investor orgoing public.Especially,these banks have taken useful explorations all along in building topmanagers’incentive and restraint mechanism,and have gain some effectiveness.As theinternational financial crisis occurring, some problems which go against the commercialbanks’sustainable development are emerging in the field of top managers’compensation incentivemechanism.Based on such background, the paper studies the top managers’ incentive mechanism of thelisted banks in China and explores how to design the top managers’ incentive mechanism,whichwill have great importance to the banking industry’s temperate and sustainable development inChina. Firstly,we make a summary of those literatures about senior managers’ compensation andcompany’s performance to find the blank space that we can expand. Then we collect and settleannual reports of14listed banks and analyze the statistic to describe the situation and problems ofsenior managers’ compensation in our listed banks. Then based on the principal-agent theory, wechoose senior managers’ compensation and bank’s performance as dependent variables, andchoose such variables like risk, growth, corporate governance to be control variables. And wemake compensation decision model, compensation viscous model and compensation effect modelto make a complete study of the relation between senior managers’ compensation and bank’sperformance.Finally, through the analysis presented in the current international and domestic situation,perfect our executive compensation mechanism listed commercial banks some policyrecommendations, including: incentive pay should be combined and performance management;combination of short-term incentives and long-term incentives; improve corporategovernance,strengthen internal supervision; improve the quality of information disclosure of thecommercial banks, strengthen investor and public supervision; great efforts to cultivate the marketof professional bankers.