| Weather corporate governance structure effective or not, is a hot issue of research and discussion of the theoretical at home and abroad. Board governance structure has also been a concern. The scholars have tried to explore a way to remuneration arrangements related to the interests of all parties, but due to the different characteristics of each industry and company, the company board governance and top manger’s compensation arrangements do not follow the law.With the development of the modern economic and society, China’s commercial banks have been fully open. By introducing a series of measures, the management system and operating mode of the banking industry have been greatly improved and received good results. The performance of banks have improved. However, the continued rising executive pay make more and more people begin to pay attention to this problem. Many experts and scholars began to explore the problem of high-paying banking executives.One hand, the high-paying can produce very good incentive for employees. Because higher salaries will have a positive effect to attract talents and retain talents. The bank is a industry which requires higher human resources. High salaries can retain talents, and thus can improve the company’s overall strength and market competitiveness. However, due to China’s banking industry is not good, so there exist executives control the remuneration of this undesirable phenomenon.Based on this background, the sample of this article includes China’s16listed commercial banks. To explore the relationship between the governance structure of the Board and executive pay.This paper is divided into five parts, each part structure is as follows:Part one:Introduction. Firstly, I made a brief introduction of relevant policies and regulations for executive compensation issues and the state of China’s listed banks in recent years. Secondly, I defined some concepts involved remuneration and board governance and gave the background、purpose and significance of the topics. Then I introduced the research methods and content framework. Finally, I introduced the innovation of this paper, and the presence of the inadequacies of the proposed addition.Part two:Literature review. I review related literature at home and abroad.Part three:Theoretical Analysis. In this part, I gave some introduction of theory about principal-agent, optimal contract theory, equity incentive theory and so on. These laid a theoretical foundation for this study.Part four:Empirical Test. Firstly, I came up with hypothesis, set variables, and I gave descriptive statistics analysis and finally established a model to do empirical regression analysis.Part five:Conclusions and policy recommendations. In this part, I gave the interpretation of relevant empirical results, and some advices.The conclusions in this paper include the following four aspects:First, the size of the board and executive pay levels between the two was a significant positive correlation. That means the more members of the Board of Directors, the higher the level of executive pay. This is because the smaller staff of the Board of Directors, general internal members in communication and coordination will be easier, many decision-making problems easier to agree on executive pay levels will be easier to work out a reasonable range.Second, this assumption matches with the beginning of the text. This suggests that more independent directors to prevent executives excessive pay in a certain role.Third, the Chairman and the President’s office with executive pay levels was a significantly positive correlation. This is inconsistent with the beginning of assumptions.Fourth, Convene a meeting of the Board with executive pay levels was a positive correlation. This assumption does not match with the beginning of the text.Through empirical research, we draw the following conclusions:First, control the size of the board, to avoid too many of its members. Only the good size of the board will allow the Board to better communicate in the development of decision-making and discussion questions, easy to reach an agreement between them, while executives play a good role in the supervision and evaluation of this executive play the level of restrictions is also very beneficial.Second, Because too low will limit the number of independent directors to its full role to play, it is necessary to increase the proportion of independent directors. In addition, it should increase the independence of the independent directors.Third, chairman of the Board and the president should realize the true sense of the two ministry. Only the chairman of the board and president of two realize the true sense, they can carry out their duties. In order to make the development of the bank’s improving daily. The chairman of the board should perform their own assessment of regulatory obligations, things do not get involved in the interference for the bank’s day-to-day management aspects of the bank’s management team should be allowed to complete these tasks.Fourth, procedures and content of the meeting of the Board should be more detailed specifications. The convening of the meeting of the Board play a great role in improving the governance mechanism. Therefore, we should make more detailed regulations of the Board of Directors meeting.Fifth, standardize and improve the system of remuneration committee. A Remuneration Committee can develop effective compensation contract and incentive pay to solve the agency problem. Therefore, the establishment of a remuneration committee to promote the listed commercial banks to establish a sound evaluation system and pay system for senior management to make the behavior of senior management, to make them in the shareholders of the target the purpose of the work range.Last, continue to improve China’s listed banks executive compensation incentives. Good pay incentives and scientific and rational incentive pay is very beneficial to enhance the bank’s competitiveness and governance efficiency. Therefore, it should continue to improve. |
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