TITLE

COMPENSATION OF THE CEO, BOARD OF DIRECTORS AND BANK RISK TAKING

AUTHOR(S)
Ayadi, Nesrine; Boujèlbène, Younès
PUB. DATE
June 2012
SOURCE
Journal of Advanced Research in Management (De Gruyter Open);Summer2012, Vol. 3 Issue 1, p4
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
This article aims to study the effects of the attributes of the Board of Directors and the remuneration of the leader in charge of risk-taking from thirty European commercial banks. This research uses a technique of static panel data over the period of 2004-2009. The results of our study suggest that the relationship between the remuneration of the leader and the risk of insolvency is statistically negative. Similarly, our results show that accumulating the functions of the CEO and the chairman of the board of directors negatively affects the risk of insolvency. They also indicate that there is a negative correlation between the frequency of the board directors' meetings and the insolvency risk. This study gives an overview about the fact that both the Board of Directors and the remuneration of the Chief Executive Officer (CEO) have an important and dominant role in controlling the leaders of the European commercial banks. Hence, the control manifested by the Board of Directors has been strengthened by the CEO's compensation which is considered a motivating mechanism of control for the CEO.
ACCESSION #
84010775

 

Related Articles

  • COMING DOWN TO EARTH. RYTERBAND, DANIEL J. // Conference Board Review;Spring2010, Vol. 47 Issue 3, p24 

    The article expresses the view that the pay gap between chief executive officers (CEOs) in the U.S. and abroad is narrowing, and explains why this is so. The author believes that board compensation committees in the U.S. are giving greater consideration to what is both affordable and justifiable...

  • The Choice of Different Types of Subjectivity in CEO Annual Bonus Contracts. Hoöppe, Feli; Moers, Frank // Accounting Review;Nov2011, Vol. 86 Issue 6, p2023 

    In assessing the performance of the CEO, subjectivity by the board of directors is often present in one form or another. We specifically focus on: (1) the ex ante option to ex post override a formula-based contract ("discretionary bonus"), and (2) the ex ante absence of any formula in a contract...

  • The Influence of the Board of Directors on the Executive Compensation in the Banking Industry. Ayadi, Nesrine; Boujèlbène, Younès // Global Business & Management Research;2013, Vol. 5 Issue 2/3, p83 

    Purpose: The objective of this study is to examine the effect of the attributes of the board of directors on the compensation of the CEO of thirty European commercial banks. Design/methodology/approach: This research uses a technique of static panel data over the period 2004-2009. The study was...

  • Paid to fail. McCormick, Iain // New Zealand Management;Jul2010, Vol. 57 Issue 6, p63 

    The article discusses ways to deal with the issue of overpaid chief executive officers (CEOs) based on the Australian Productivity Commission Inquiry Report on Executive Remuneration. Statistics indicated that the average CEO of the 44 largest companies in New Zealand earns 1.29 million U.S....

  • CEO Pay and the Market for CEOs.  // Working Papers -- U.S. Federal Reserve Board's Finance & Economi;2012, p1 

    The article discusses the pay and labor market for chief executive officer (CEO). It states that the compensation decisions of the board reward educational credentials, career, and reputational credentials of CEOs. It says that sorting considerations in the CEO labor market are significant...

  • More Boards Are Tying Executive Pay to Performance. Soltis, Beth // Credit Union Directors Newsletter;Oct2012, Vol. 38 Issue 10, p1 

    The article reports on the 2012-2013 CEO Total Compensation Survey of the Credit Union National Association (CUNA) regarding chief executive officer's (CEO) total pay. It states that several corporate boards use performance awards to align executive compensation with performance. It says that...

  • CEOs Have Averaged 6.6% Pay Increases Over The Past Year. Birch, Ray; Diekmann, Frank // Credit Union Journal;12/24/2012, Vol. 16 Issue 52, p58 

    The article reports that salaries of credit union (CU) chief executive officers (CEOs)in the U.S. increased by a national average of 6.62 percent in 2012, according to the latest compensation and benefits survey for the CU movement by Executive Compensation Solutions. It highlights the widening...

  • Numbers.  // InsideCounsel;Jun2014, Vol. 25 Issue 270, p15 

    This section presents information on developments in executive compensation and hiring in the U.S. as of June 2014. Topics discussed include the gap in pay between chief executive officers and their employees, how companies seek out new board members, and the severance package awarded by...

  • Executive Compensation and Business Policy Choices at U.S. Commercial Banks. DeYoung, Robert; Peng, Emma Y.; Yan, Meng // Journal of Financial & Quantitative Analysis;Feb2013, Vol. 48 Issue 1, p165 

    We show that contractual risk-taking incentives for chief executive officers (CEOs) increased at large U.S. commercial banks around 2000, when industry deregulation expanded these banks’ growth opportunities. Our econometric models indicate that CEOs responded positively to these...

Share

Read the Article

Courtesy of THE LIBRARY OF VIRGINIA

Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics