ZHANG Xuelan,etc:CEO Compensation and Systemic Risk:An Empirical Study of Listed Commercial Banks in China (2007-2013)

Abstract：It is generally acknowledged that improper compensation incentive is one of the deep roots of financial crisis.Therefore, optimization of compensation structure is considered as a key measure of pertinent regulation policy.In light of the difference between oriental and occidental banking compensation, this paper separates bank CEO compensation into three parts, i.e., power compensation, incentive compensation and manipulation compensation and empirically tests the connection between CEO compensation structure and systemic risk sampling with the listed commercial banks from 2007 to 2013.It is evidenced that the incentive compensation has a positive relation with systemic risk contribution significantly, functioning through the maturity mismatch channel.Hereby, it is imperative for the authorities to urge commercial banks to adjust CEO compensation structure and enforce corporate governance to correct the deviation of compensation mechanism.

Key words： CEO Compensation   Commercial Banks   Systemic Risk

source:Finance & Trade Economics ,No.11,2014