Dissertation > Economic > Economic planning and management > Economic calculation, economic and mathematical methods > Economic and mathematical methods

Empirical studies of executive pay and corporate performance of China 's listed banks

Author HanLin
Tutor LiuHuiXia
School Northwestern University
Course National Economics
Keywords Listed banks Salary structure Salary level Compound performance Salary system Formation mechanism
CLC F832.3;F224
Type Master's thesis
Year 2010
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For the purpose of investigating the rationality and feasibility of restricting the salary among the management at home and abroad, and find the basic problem arousing the restricting in listed banks as well as the solution to it, this paper takes 14 listed banks in China as a case, firstly, a empirical study on the relationship between the structure of managers’ salary and the performance of corresponding listed banks, then another empirical research on the relationship between the level of salary among the management and the performance of corresponding listed banks, finally, through the analysis of the statistic results, a further study on the determinants of the structure and level of managers’salary.Based on the empirical study between the structure and level of the managers’salary and the performance of corresponding listed banks, the paper comes to the optimization of variable-selection and model-constructing according to predecessor’s research results, where, return on net asset (ROE) and recovery of net asset and cash (ROC) are selected to measure the compound performance of listed banks in China, the rate of independent director(RID)is selected to measure the state of company governance, rate of shareholding of advanced management(AMSR)is introduced to be half of the structure of advanced managers’salary, total salary of top three directors’salary(TTD)、allowance of independent directors(AID)and total salary of directors、supervisors and Advanced managers (DSM) are used to measure the salary level of advanced managers, at the same time, three linear regression models are set, in the first model, ROE is set as a dependent variable, AMSR is set as a independent variable; in the second model, ROC is used as dependent variable, and AMSR is used as a independent variable, in the third model, RID plays the role of dependent variable, and AMSR plays the role f independent variable; meanwhile, a multiple linear regression model is established, in which, TTD, AID, DSM, together, play the role of independent variables, and ROE together with ROC play the role of dependent variables. Through the establishment of linear regression models, the linear relationship between the structure and level of managers’salary and the performance of corresponding listed banks with data being processed using the statistic software SPSS17.0,meanwhile,the non-linear relationship between them is estimated through the construction of cubic equation and curve fitting, specially, before put data available into the models directly, necessary adjustment to the data is also made in order to make the data solid, and check the feasibility of the models through the solving the models above.The result shows that the linear relationship between the structure and level of managers’ salary and corresponding listed banks is not significant from the year of 2001 to 2009,nor the non-linear relationship; the difference between the stock incentive in state-owned banks and that in non-state-owned banks is significant, while,the performance of state-owned banks and that of non-state-owned banks is not the case, that is, compared with the non-state-owned banks, the company governance in state-owned banks is relatively low, owning the basic reason that the system of salary and its formation mechanism are far from perfect.Structurally, the paper is consist of six chapters, exordium is put in this chapter to introduce the background, purpose, content, structure arrangement, the way to research and the method to solve key problems; In the second and the third chapter, literature review is made to channel the problem that the paper aims to study on and the feasible field to develop; in the fourth and fifth chapter, econometric models are established, solved, adjusted and explained; The final chapter tells the conclusion and offers corresponding advances.

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