CEO compensation and bank risk - Is compensation in banking structured to promote risk taking?

• 成果类型: Article
• 署名作者: Houston, JF; James, C
• 署名单位: State University System of Florida; University of Florida
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/0304-3932(95)01219-2
• 发表日期: 1995
• 页码: 405-431
• 关键词: financial institutions; COMPENSATION; Government policy

摘要

This paper examines whether executive compensation in banking is structured to promote risk taking. We find that, on average, bank CEOs receive less cash compensation, are less likely to participate in a stock option plan, hold fewer stock options, and receive a smaller percentage of their total compensation in the form of options and stock than do CEOs in other industries. Cross-sectional differences in the structure of compensation contracts within banking are also examined. We find a positive and significant relation between the importance of equity-based incentives and the value of the bank's charter. This result is inconsistent with the hypothesis that compensation policies promote risk taking in banking.