SPD Bank’ Employee Compensation

As the core of contractual relationship between the enterprise and employees, employee compensation has highly attracted society’s attention, while commercial banks are the focus of attention. In the16listed banks, employee compensation of Shanghai Pudong Development Bank is the most typical. On one hand, It has been in the top compensation list, on the other hand, its employee compensation payable is significantly higher than other joint-stock banks in recent years and its trends is different from other banks. As a result, we take SPD Bank as an example for the study of employee compensation measurement.Accounting measurement is a process of measuring various economic activities and their results in money or other unit. Employee compensation measurement is the process of deciding the amount of money paid to employees. As a knowledge oriented industry, commercial banks’labor cost holds a large proportion in the total operating cost, employee compensation measurement will have great influence on the enterprise.From the aspect of enterprise management, on the one hand, as a labor cost and expenditure of cash flow, employee compensation not only affect the enterprise accounting benefit, but also affect the value of the enterprise. For this reasons, enterprises have a motivation to control it. On the other hand, as a way of incentives, Reasonable and effective compensation design can not only motivate employees to work hard, improve enterprise performance, but also can reduce the supervision cost of enterprises, improve the enterprise human resources quality, achieve the goal of maximum corporate value. Therefore, the enterprise establishes performance-related compensation mechanism.From the aspect of accounting, different from other contractual relationship, compensation contracts is the result of the game. It is not accounted by stable basis, so enterprises have larger independent decision-making power. The accounting measurement of employee compensation may have great influence on the accounting information. The change of employee compensation can affect total operating costs and expenditure of cash flow, thus, it can affect the bank’s statement of income and cash flows. Due to these characteristics, employee compensation can easily become an important means of earnings management.In this paper, we take SPD Bank as example. This paper analyzed employee compensation from two aspects, one from the aspect of the cost-benefit to check whether it is the measurement of labor cost and workers’s contribution; the other from the aspect of dynamic change of the differences between the drawn and actual payment to answer whether it is a means of earnings management.In the process of case analysis, this paper use comparative analysis. We compare the compensation data of the SPD Bank over the years. We also compare industry data to research and analysis thoroughly. This paper found that employee compensation is the gaming result of the interests of all parties, not completely controlled by the operating performance and the labor costs; Employee compensation can easily become a means of earnings management.Research about employee compensation before mainly focuses on the study of compensation incentive and corporate performance, few from the perspective of accounting measurement. This paper takes SPD Bank as example, through deep analyzed its employee compensation to answer the question and to enhance the public understanding of the accounting of employee compensation of commercial banks.