Design Of SD Bank Executive Compensation System

In recent years, with the rapid development of the economy, the inter-agency competition become increasingly fierce. After the outbreak of the financial crisis, the financial sector, especially banking remuneration of senior management pushed to the cusp of a time limited pay orders have launched become a hot topic for discussion of the banking sector salary system. In our country, the full liberalization of the banking sector has been six years, as the main body of China’s financial markets, not only faced with fierce competition from international, as well as the burden of support for sound and fast economic development an important role. Banking is a service industry, and its fixed assets, human capital, high dependence, is dependent on the knowledge and wisdom of the people, the replacement cost of labor is higher, therefore, the senior managers of financial enterprises largely determine the survival and development of the enterprise. In this case, the payment system is good or bad to play a key role.Payment system is the organization of the wage system, and on the organization of the standard reward system, which is based on the proficiency of the employees’labor, complexity, responsibility and labor intensity basis, in accordance with the employees’ actual completion of the work quota, time or labor consumption and meter payment of labor remuneration. Payment system as an important part of human resource management, has a crucial role in the survival and development of the bank, while the scientific and rational system of executive compensation, and to maintain and stimulate the executives work enthusiasm, enhance loyalty executives to attract outstanding talent, of great significance to promote the sustained and healthy development of the commercial banks.This paper first introduces the background significance of the topic, research the main content and compensation management concepts. SD bank, for example, through the analysis of its executive payment system, to explore in depth the characteristics to find out the deficiencies:First, the payment system are a form of currency reflects, exaggerated the role of monetary incentives, and as recognized as the most effective form of medium-and long-term incentive equity incentive not to be considered and applied. High proportion of short-term incentives in the remuneration system, the proportion of low-medium-and long-term incentives, with the lack of stock options this incentive carrier related. Third, the limited role of the Nomination and Compensation Committee of the Board of Directors consists of the lack of the support of an independent third-party compensation consultant company. These deficiencies not only SD banks personality problems, to a large extent is the common problem of China’s commercial banks.Chapter IV of this paper to address the problem, learn from the advanced compensation philosophy and methods, under the premise of compliance with domestic laws and policies, the use of key performance indicators (KPI), Balanced Scorecard method, pay-for-performance management theory and methods, SD bank executive compensation architecture is divided into basic pay, performance pay, medium-and long-term incentives and welfare allowances, refine the decomposition and reconstruction and focus on one of the pay-for-performance, long-term incentive portion of incentive stock options to explore, SD bank executives payment system in order to re-build. Through the implementation of the new payment system and the implementation of safeguards, and fully mobilize the enthusiasm and ingenuity of executives to enhance the bank’s performance and visibility, to achieve a win-win commissioned agent, and lay a solid foundation for the market and future development.