The Research On The Relationship Between The Executive Pay And The Performance Of Chinese Commercial Banks And The Executive Pay Stickiness

The principal-agent problem between shareholders and executives in the company has been a focus of academic attention. In addition to the basic salary, the effective incentive measures for executives can reduce the principal-agent cost and create greater value for the company. The listed executive pay of Chinese commercial bank has been at a high level in all walks of life. Especially in Ping An Bank, the executives even were paid for tens of millions annually. For a time, the rationality of the executive pay of financial institutions has arisen the concern of the public. The "limited pay boom" of Obama’s implementation has aroused worldwide concern since the sub-prime crisis in the United States happened in 2008 which led to the global financial tsunami. The rationality of the constitution of executive pay in commercial banks is worthy of further study in the background of the limit of the high executive pay and the enterprise reform.Based on the above background, this paper mainly studies the performance sensitivity of the executive pay in China’s commercial banks and analyzes the stickiness of the executive pay briefly with the relation. Firstly, this paper puts forward the research ideas and framework, sorts out the innovation points through the relevant literature at home and abroad, and describes the theoretical basis of this paper. Secondly, this paper makes a statistical analysis of the present situation of the executive pay in Chinese commercial banks according to the relevant information and data, and then summarized several characteristics embodied in executive pay. Thirdly, this paper takes the listed commercial banks in our country as the research sample, selects the variables, collects data, and establishes the panel data model to study the relationship between executive pay and corporate performance and study the difference between the two groups that were divided into the state-owned banks and non-state-owned banks. Besides, this paper adds the analysis of the stickiness of based on the sensitivity. At the last, the results show that executive pay and corporate performance are significantly positively related, and the stickiness of executive pay does not exist significantly. In terms of these conclusions, relevant policy recommendations are put forward finally.