A perspective of CEO incentive compensation in examining the agency problem of equity in the U.S. banking industry.

• Main Authors: I-Chen Liu, 劉怡君
• Other Authors: Min-Lee Chan
• Format: Others
• Language: zh-TW
• Published: 2008
• Online Access: http://ndltd.ncl.edu.tw/handle/01777110481650866114

碩士 === 靜宜大學 === 財務金融研究所 === 96 === When the separation of managership and ownership exists, firm will try to issue CEO equity-linked compensation in order to solve the agency problem of equity and to enhance firm value. Whether this phenomenon exists in regulated banking industry is worthy to be addressed. By employing simultaneous equation, the sample of U.S. banking industry is used to explore the relationship between CEO incentive compensation and bank performance so as to examine existence of the agency problem of equity in banking industry. Besides, considering external monitoring mechanism in banking industry, whether the incentive compensation could substitute for the external monitoring is also examined. The empirical results find incentive compensation does exist in regulated banking industry, however, it becomes weak after controlling external monitoring mechanism. The results show that the performance of banking industry relies more on external monitoring mechanism than does on the CEO incentive compensation.