Listed Joint-stock Commercial Bank Executives Pay Positive Effect On Comprehensive Performance

Nowadays, the public pays more attention on the benefits of CEOs of banks andsuspect whether the good benefits could bring the banks better performance. Thereare some different on the result between the Chinese scholars and foreign scholarsbecause of the index selection. So, in this article, we select sufficient relativevariables, then using Principal Component Analysis to compute comprehensiveperformance score to found the relationship between the CEOs payment andcomprehensive performance. We select eight joint-equity banks including ChinaMerchants Bank, China Citic Bank, Shanghai Pudong Development Bank, ChinaMinsheng Banking Group.Ltd, China Everbright Bank, Industrial Bank Co. Ltd,Huaxia Bank, Shenzhen Development Bank as our research target in order to offer aproposal to Joint-stock commercial Banks to the compensation committee about theCEOs payment.First of all, this article use qualitative analysis in the relationship betweenCEOs payment and comprehensive performance, then found that problems about thelarge difference among the payments of CEOs, irrational parts of the payments andlittle relationship with the comprehensive performance. Second, we can see that theCEOs’ benefits and banks’ comprehensive performance have a positive relationshipfrom quantitative analysis of multiple regressions. However, the result above isdifferent from the result form qualitative analysis, we using qualitative analysis asthe criterion and believe that the performance is the basic of executive pay. CEOs areencouraged by the high payments. In addition, this article also use the regressionanalysis on the delay in payment, stock ownership incentive, and banks performance,research their effect on the banks comprehensive performance. This article alsoprovides empirical basis for other banks whether to offer delay in payment and stockownership incentive. Besides, the delay in payments is not exist in the previousresearch. We found that the delay in CEOs’ payment could give a good explanationon the banks’ comprehensive performance and has a positive relationship with the capital adequacy ratio, a passive relationship with the non-performing loan ratio.CEO stock ownership incentive has no effect on banks’ comprehensive performanceand other factors.At last, this article present three advises on the benefits of CEOs:1: the basicpayment should first consider the internal equity (Job evaluation) and then theexternal equity(Market salary survey).2: survey the market about the payment,performance salary should consider the profits factor and non profits factor, shortterm incentive and long term incentive and pays more attention on long termincentive affect and increase long term incentives ratio.