The Research On Influencing Factors Of Executive Compensation Of Chinese Listed Banks

Affected by the subprime mortgage crisis in 2008, China’s real economy depressed,but China’s bank executives still share the high pay, which cause heat discussion. In response to this phenomenon, many scholars carry out a comprehensive study and find our executive compensation system exist excessive reliance on short-term cash stimulation, single index evaluation, executive compensation and can not establish a connection with non-performing loan ratio. There are also many scholars studying the connection between the pay gap and the executive pay. But,Few scholars set the employees pay as a control group, by comparing the common factor to find the problems.This paper puts 16 china listed banks as research objects,uses variable intercept fixed effect model to make a regression,sets employee compensation as a control group,by comparing the same explain differences in the coefficients of variables,then find the irrationality.The empirical result show that the total amount of executive pay of Chinese listed banks is mainly related to the size of the independent directors, the size of the first major shareholders of the last year, the size of the first major shareholders of the last year, and the annual remuneration of the last year, 2011 to 2014 policy variables.Among them, the coefficient of annual revenue growth rate is 1.224, which shows that the evaluation system is still not sound, still put more emphasis on performance improvement, the requirements for asset safety and operational stability is relatively low.From the structural perspective, China’s bank executives in the pay to the basic salary and performance based, the majority of listed bank executives do not have ownership, which shows that the emphasis on short-term stimulus, the lack of long-term incentives, easy to lead executives in order to get short-term high pay and the expense of bank long term development. At the same time, the time dummy variable display our executive compensation and 2011 to 2014 policy variables negatively correlated and the absolute value of the coefficient is more and more big,that in our country in recent years continue to overweight executives salary limit policy reflects the salary limit effect.From the structural perspective, China’s bank executives pay is still salary-based not equity-based,which shows that the evaluationsystem still emphases on short-term stimulus, lack of long-term incentives. At the same time, the time dummy variable display our executive compensation and 2011 to2014 policy variables negatively correlated and the absolute value of the coefficient is more and more big, that in our country in recent years continue to overweight executives salary limit policy reflects the salary limit effect.We puts forward five suggestions: One, establish a comprehensive compensation evaluation index, considering the performance of the bank’s profitability, security and robustness; Two,establish a more transparent disclosure system of executive compensation; Three, optimize the incentive structure of executive compensation, to continuously improve the proportion of long-term incentive in the pay structure;Four,improve corporate governance structure;Five,reduce the proportion of the largest shareholder of the first major shareholders and strengthen the supervision of small and medium shareholders.Strengthen the administration of the Banking Regulatory Commission and other functional departments.