| Summary: | 博士 === 國立中央大學 === 產業經濟研究所 === 103 === The Important Factor Analysis for Taiwan Banking Industry about the Financial Performance、Insider Shareholding and the Remuneration of the Directors and Supervisors
Abstract
The thesis was focus on the important factors that influence the performance of the corporate governance about the banking industry in Taiwan. It analyzes about the main factors of financial performance (ROA, ROE) 、remuneration of directors and supervisors and insider (supervisors 、boards and managers , etc) shareholding .
The thesis covered three topics which were summarized as below:
In chapter 2 analyses the main factors which affect the financial performance (ROA, ROE) of the banking industry. According to the published literature, that there is an endogenous relationship between the financial performance and insiders ownership, based on the remuneration system and the internal information mechanism. So as to use the two stage least squares for panel data model to analyze the relationship between the proportion of internal shareholders shareholding and the financial performace ROA and ROE. As a result , the analysis find that the relationships of the proportion the proportion of internal shareholders shareholding internal shareholders shareholding between 25%-100% are showed as inverted S-type.
Apperantly, the conflict of interest hypothesis and the interest convergence hypothesis coexist in the banking industry, the Financial Supervisory Commission should pay attention to the result of the analysis to control the portion of insider shareholding when manage the banking sector and design the mechanism to determinine the relevant financial regulations.
Chapter3 concerns the empirical research of the important factors analysis of the proportion of insider shareholding :
In order to avoid a single financial indicator is incomplete to show to real condition. In this study, focus on the domestic banking sector as research subjects using different variables to measure the equity structure so as to analyze the relationship with ROA and ROE.
The empirical results show that the relationship between the proportion of insider ownership and financial performance, with endogenous. When the financial performance is excellent, the insider will decline the insider ownership stake because they have gotten the dominant position , to keep more shares will gain nothing but increase the higher risk ,so the insiders will adjust the ratio of portion. They should increace the portion of insider ownership when the financial performance decreased to the lower condition.By the way, the proportion of insider ownership is not affected by remuneration of board of directors and supervisors.
The remuneration analysis of board of directors and supervisors were classified into three types, they are non-incentive、incentive and total remuneration of board and directors and supervisors.
The total sample is divided into before and after the financial crisis, a financial holding company and non-financial holding company banks , government holding shares banks, private share holding banks ,etc .There are six sub-samples, to explore their remuneration payments situation respectively.The paper found that there is not any relationship between the financial performance and remuneration of board.
According to the regulation that the bank should disclosure the relationship between the remuneration of board and financial performance in the annual report, but the empirical analysis found the remuneration of banking industry without any significant relationship with financial performance. But after the tsunami , the empirical analysis find that the higher deviation of operating interest with the average level of operation interest of the banking industry, the higher incentive remuneration of directors and directors than before will happened.By the way,there is not any significant correlation between the risk indicator (BIS) and the remuneration either.
To summarize the results above, the three main factors that affect corporate governance in the thesis, the insider ownership structure is the core of the problem. Keep fat cats from happening generation, the FSC think the remuneration to directors and supervisors should connect the performance and risk in 2007.The way can solve the「Fat Cat」problem immediately. But to manage the insider ownership structure is more important way to solve the agency problem.
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