Commercial Bank Executive Compensation Factors

The "high price" paid executives of listed banks has been a hot topic of recent years, the return on capital of the banking sector has been far more than the oil industry, and the banking sector domestic veritable "monopoly" industry. However, with the impact of the U.S. subprime mortgage crisis in2007and the2008global financial crisis broke out, the impact of listed bank executive’ remuneration has caused the public and government department great importance. On the other hand, time-to-market of domestic banks generally late, a total of only16domestic listed banks by the end of2010, together with the China Securities Regulatory Commission clearly specified information disclosure of listed companies until1999. Therefore, there is more scarce empirical research on the listed bank executive remuneration. The listed Bank has its unique industry particularity, and also been in common with the general corporate. The focus of the dispute is how reasonable incentive for executives of listed banks and executive paid of listed banks determined for what factors.The article selected the relevant data of the16listed banks in2009-2011as samples, summed up the impact factors of listed bank executive pay through a literature review and related analysis, using EXCEL, SPSS16.0, EVIEWS5.0statistical tools to conduct an empirical study on the influencing factors of domestic listed bank executive paid. Sequentially samples for analysis, time series analysis and multiple regression analysis. First, the article analyzed the affect of stock prices and dividends of listed banks on executive compensation. And then analyzed the link between the listed banks profit composition and fees. Finally, the article analyzed many of the factors listed bank executive paid. Regression analysis on listed banks in the scale of operation, operating performance, business growth, the stock price, the size of the board, the board of supervisors of scale, the chairman and general manager of individual circumstances, the nature of the largest shareholder, the proportion of the largest shareholder, executives shareholdings, executives age, executive term limits, listed age of13factors, came to the conclusion that listed bank executive paid is positively correlated with the bank’s business growth, stock price, the size of the board, executives age,with the negative correlation of the board of supervisors scale. Other factors were not significant, and may be associated with the listed banking industry characteristics as well as specific operating conditions.According to the results of the empirical analysis, the article put forward relevant proposals to listed commercial banks pay incentive system. The article provides recommendations and reference for listed banks to establish reasonable compensation incentives through improving the bank’s internal governance structure, promoting market-oriented professional managers, establishing the short-term incentives and long-term incentive model combined salary structure,and sounding banking remuneration&performance appraisal system.