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Empirical Test on Financial Listed Companies’ Executive Pay-for-Performance Sensitivity: Based on Performance Index PFMI
SUN Li,YANG Li-Ping
2016, 48 (1):
169-179.
doi: 10.16382/ j.cnki.1000-5579.2016.01.019
The high pay of the executives in financial companies has attracted the attention of the government and society. Since the financial sector plays an important role in the macro-economy, the government unveiled a series of compensation management and performance evaluation regulations. Considering the particular operation mode of the four different financial sub-sectors, that is, banking, insurance, securities and trust, this paper designs performance proxy variables PFMI according to the “financial performance evaluation standards”, and takes mixed regression and panel data regression approaches to study executive pay-for-performance sensitivity of the 42 financial companies listed on A-Share. This is quite different from most current studies, in which only one single financial performance indicator has been used. By comparing the sub-sectors of the financial industry, this paper shows that the listed banks’ executive pay has a positive correlation with bank performance and the executive pay-for-performance sensitivity is higher than other financial sectors while the pay-for-performance sensitivity of insurance takes the second place. Also, there is no significant correlation between the executive pay and the operation performance for securities and trust. These findings will have some empirical reference value for further improvement of financial institutions remuneration management.
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