| Issues such as the breath-taking sky-high compensation of banks' senior executives,uncontrolled management power and failed salary incentive mechanism of senior executives were once widely reported by media.In the face of the hot potato of the compensation of banks' senior executives,various governments have introduced various policies to "limit salaries",and also take a variety of methods to improve the incentive effect of compensation on senior executives.Our government also guided CBRC,the Ministry of Finance and other institutions to issue a series of measures to restrict compensation of banks' senior executives.For example,Guidelines on Robust Compensation Supervisory of Commercial Banks promulgated by China Banking Regulatory Commission in 2010 specified clearly that the performance salary of the main responsible person is based on the annual examination results and determined within 3 times of the basic salary.Under pressures from all sides,senior executives of many banks,especially state-owned banks and state-owned holding banks cut their salaries one after another.In today's society in which people do "not worry about poverty,but rather about the uneven distribution of wealth.” the huge compensation of banks' senior executives has caused widespread social contradictions.But will constant decrease in compensation of banks' senior executives really to the benefit of the sustained and healthy development of banks? This has induced extensive research by scholars at home and abroad.As everyone knows,excellent senior management talents play an important role in financial industry which is famous for its high risk.It can be said that most of the competitions among banks are competitions for outstanding talents.Meanwhile,currently China's economic growth slows down and Internet finance suddenly rises as a new force,which undoubtedly brings enormous challenges to China's banking industry which is still in the strategic transformation stage,thus the competition will be very fierce.Thus,establishing a scientific and reasonable salary system for senior executives is conducive to the improvement of enterprises' overall strength and formation of enterprises' comprehensive competitiveness,and also can help enterprises to be in an invincible position in the fierce market competition.In view of this,this paper carries out analysis and research on the case of compensation of senior executives of Bank of Ningbo.Bank of Ningbo is a successful listed urban commercial bank,and ranks No.220 among top 1000 world banks announced in 2014.Meanwhile,Bank of Ningbo implemented stock option incentive earlier than other companies in the same industry and have achieved very good results.Because company's senior executives held large shares,the successful listing of Bank of Ningbo in 2007 resulted in 7 billionaires and more than 300 millionaires,which has also attracted widespread concern in the society.Therefore,this paper selects compensation of senior executives of Bank of Ningbo as the entry point,strives to alleviate social conflicts caused by sky-high compensation of banks' senior executives to a certain extent through research on the compensation system of senior executives,and help enterprises to achieve effective compensation incentive system so as to enhance their competitiveness.This paper starts from the research background and significance,and then reviews relevant research of domestic and foreign scholars from the following four aspects: characteristics of the compensation of listed commercial banks' senior executives,correlation of the compensation of listed commercial banks' senior executives with performance,correlation of the compensation of listed commercial banks' senior executives with managerial authority,factors influencing the compensation of listed commercial banks' senior executives,then briefly reviews their research status,then puts forward the research ideas,research methods,research contents and framework of this paper.The second part of this paper introduces the definition,basic form,influencing factors,functions and effects of compensation of senior executives,and expounds three basic theories of compensation of senior executives-principal-agent theory,enterprise contract theory and incentive theory,and take them as the theoretical foundation for the case analysis of compensation of senior executives of Bank of Ningbo.In the case analysis of compensation of senior executives of Bank of Ningbo,this paper introduces the basic information,compensation structure and specific circumstances of existing senior executives,and carries out detailed analysis on the existing problems and its causes.The study finds problems in the following fours aspects of compensation of senior executives of Bank of Ningbo: human capital value is not fully reflected which can easily lead to brain drain,salary structure is single and long-term incentive mechanism is not perfect,performance compensation assessment and evaluation mechanism is not perfect,lack of spiritual incentives to senior executives.After in-depth study,we find that the causes of the above problems are as follows: administrative intervention leads to underestimation of human capital value of senior executives,lack of effective compensation supervision,unreasonable corporate governance structure.The fifth part of this paper introduces the advanced experience of compensation of senior executives of HSBC Holdings,and reaches the following four aspirations: establishing and constantly perfecting the long-term "equity incentive plan",strengthening the information disclosure of compensation of senior executives,establishing scientific performance evaluation system for senior executives,perfecting banks' corporate governance structure.Lastly,this paper proposes seven specific and feasible suggestions from three aspects-perfect the corporate governance structure of Bank of Ningbo,establish a diversified compensation incentive mode,perfect performance compensation evaluation and assessment mechanism so as to perfect the compensation system of senior executives of Bank of Ningbo: further improve the functions of board of directors and board of supervisors;ensure the independence of remuneration committee and give full play to its functions;establish long-term equity incentive plan;perfect the deferred payment system of performance and annual salary;strengthen the construction of spiritual incentive mechanism;implement comprehensive and dynamic assessment and evaluation index;establish highly efficient evaluation result feedback mechanism.We wish the above suggestions can provide reference for China's listed commercial banks to further perfect the construction of compensation system of senior executives. |
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