The Study Of The Relationship Between Senior Managers’Compensation And Competitiveness Of Listed Banks

Caused by the subprime mortgage crisis of the global financial crisis makes the community on finance phenomenon of sky-high executive pay give great attention and strong dissatisfaction, governments have on executive pay in the financial control. The U.S. government began restricting the government bailout of financial executive pay, and asked it to control the cost of expenditure; The French government upon request by the bank shall not distribute bonus, considering limiting bank bailouts of executive compensation; German government limits on bank executives annual salary, and banned bank executives to receive profits and bonuses; In the face of the crisis, the Chinese government also by the ministry of finance and banking regulatory commission successively issued a series of related institutions, such as for the salary limit way to financial industry executives. Governments will reconsider and design salary incentive mechanism built into the government reform.Relates to the overall banking industry as the main body of modern finance, the running of the national economy, its governance issues relative to the average company is also more complicated. Banking is a special industry, large commercial Banks affected by the national policy, different management style, has the very high asset-liability ratio, internal and external factors influencing bank more obvious characteristics of different from general enterprise. Banking executives pay levels high, must level salary bank executives often can be seen, caused by executive compensation problem of society is controversial, lead to social contradictions also is relatively outstanding. Facing the competition of foreign Banks, high-quality talent in urgent need of China’s banking industry, especially the outstanding commercial Banks management professionals. Good executive compensation incentive mechanism to attract talents, to promote commercial bank’s ability to compete.For commercial bank to design the incentive mechanism of executive compensation, need from commercial bank executives’ human capital and its contribution to the commercial bank management strategy for both size. From the perspective of human capital aims to arouse the enthusiasm of bank executives, a bank executive on its own resources make full use of the role, but not necessarily can achieve the business objectives of the bank. Contribution of executive management strategy for Banks from the bank Angle aims to through the executive compensation incentive mechanism, incentive executives bank development strategy, improve the utilization efficiency of bank internal and external resources, to achieve the objectives of the bank business development. Enterprises pay design must follow the strategic requirements. Bank executive compensation incentive mechanism design research based on the strategic point of view, the domestic scholars usually analysis is the study of the relationship between commercial bank executive pay and bank performance. By one or a handful of evaluation index to measure the bank performance, this certainly cannot reflect the real bank performance level, cannot guarantee that the commercial bank strategic executive compensation incentive mechanism design. While commercial Banks competitiveness reflects the bank’s comprehensive ability, more can reflect the operating performance of commercial Banks. The author thinks that, the senior management of commercial Banks as one of the main determinants of bank competitiveness, commercial bank executive compensation incentive mechanism design should be reflected from the perspective of bank competitiveness considerations.This article reviewed the domestic and foreign research literature about executive pay, for bank executives, executive pay and bank competitiveness, etc. Defining the term, after the analysis of the current situation of banking executive pay, with the developed country banking executive compensation mode are compared. Study found that commercial banks pay structure is simple, because of the lack of market basis, so that commercial Banks are less used long-term incentive plans, but mainly short-term incentives. Reference to relevant research results and experience to build the listed commercial bank competitiveness evaluation index system in our country. Using the entropy weight method to determine the weight of each evaluating index in the competitiveness of the bank, and then the bank competitiveness level is evaluated. Empirical part in China’s14listed commercial Banks in2007-2011related financial data as the research sample. In terms of explanatory variables, this paper apply through listed commercial bank competitiveness evaluation index system of measuring out the bank competitiveness as explanatory variables, the degree of government control, board independence and Banks scale as control variables, the reference to relevant research methods and experience, on the basis of panel data model is established for China’s listed commercial Banks competitive relationship between executive pay and bank and sensitivity to carry on the empirical analysis.Through empirical analysis found that listed commercial Banks in China has a negative correlation between executive pay and bank, generally higher competitiveness of the bank, the higher the level of executive pay, this paper draws a conclusion that different conclusions, explain listed commercial bank executive pay and no reasonable design based on their competitiveness. Negative relationship between executive pay and bank competitiveness, rendering between low-competitive remuneration sensitivity characteristics. Listed commercial bank executive pay and the government control the degree of negative correlation, state-owned or state-controlled listed commercial Banks to control over executive pay is more prominent. The board of directors of the listed commercial bank executive pay and independence is negatively related to the relationship, to a certain extent, shows that the introduction of independent director system in the supervision and constraint bank executive pay has played a certain role. Listed commercial bank executive pay and bank scale is not relevant, reflects China’s listed commercial Banks did not exert its scale effect of the assets.The executive compensation of listed commercial Banks in China at present, existing problems and combined with the empirical conclusion, put forward the following Suggestions:first, to increase the competitiveness of executive pay and bank compatibility; Second, perfect the compensation structure, pay attention to the long-term incentive plans; third, improve the system of information disclosure, strengthen external supervision; four, give full play to the independent director system, standardize the compensation committee; fifth, foster managers market.The innovation of this paper lies in:first, research angle, research on commercial bank executive compensation mechanism, commercial bank executive compensation design, most of scholars on the performance of commercial bank executive pay and bank relationship analysis. This article is based on the’strategic perspective empirical analysis of China’s listed commercial Banks competitiveness of the relationship between executive pay and bank, compared with bank performance evaluation, the bank competitiveness because of broad and relatively difficult to measure, so this article according to the related literature and experience to build the competitiveness evaluation index system of commercial Banks. Bank competitiveness as Banks reflects their comprehensive strength, more reflect the operations of Banks, commercial Banks should reflect the reasonable design from the perspective of commercial bank competitiveness of commercial bank executive compensation incentive mechanism. Second research methods: past research on executive compensation incentive mechanism of commercial Banks, most of them are confined to commercial bank executive pay and a few simple linear regression analysis between evaluation indicators. This paper commercial bank competitiveness evaluation index system was established, using the entropy weight method to calculate the weight of each evaluation index, so as to determine the competitiveness of commercial Banks, the panel data model is set up, for our country commercial bank executive pay and the correlation of bank competitiveness and sensitivity analysis.