| The banking industry is an important basic to our healthy operation of the economy. The development of the banking industry plays a decisive role on the social economy, and the bank’s executives are playing a vital role on their operating performance. Since China’s commercial banks reformed, Doubts and concerns about the sky-high cost of the bank’s executives are raising widespreadly.In market competition, because foreign banks have the reasonable property right structure, perfect organization structure, strong innovation capability, advanced technology, especially a set of most effective scientific salary system which inspires its executives and employees and is almost immune from China’s policy restrictions, but the remuneration incentives system of China’s banking sector is far from perfect, which caused many senior executives of domestic banks run to foreign banks. At the same time, the banks have the principal-agent problem like general corporate, namely the interests between shareholders of the bank and executives conflict because of information asymmetry. From these two aspects, in order to attract high-level management personnel to create more value for the bank, China is in urgent need of improving the banking salary management system. Perfect executive compensation management system not only can attract the senior management personnel, but also can promote the interests of executives and shareholders to consistency. So to improve the salary management system of China’s banking sector has a strong theoretical and practical significance.Based on the above background, this paper on the premise of referring to the relevant literature and understanding the development of compensation incentive mechanism of Chinese bank executive, through the collection of relevant data of 14 listed banks executives’salary and performance, drawing on the trend of changes of Chinese bank executive compensation, then through the use of Eviews5.0 to make an empirical analysis on relationship between executive compensation and performance.The analysis found that:although China has set up the executive compensation incentive system, but it is dominated by short-term incentive, exiting the following problems:lack of long-term incentive mechanism and short of executive salary information; although the bank executive’s compensation in China and the profitability indicators of bank performance is in the presence of positive correlation, but the correlation is very weak, which shows that although Chinese listed banks have gradually established the bank executive pay performance incentives mechanism, but it needs to be strengthened; although bank executive compensation system linked to profit indicators of operating performance.Therefore, in this paper, aiming at solving the problems existing in Chinese executive compensation system, banks should take the following suggestions:reform Chinese banking executive compensation incentive system; improve the disclosure system of the listed bank executive compensation; highlight the long-term incentive, improve the incentive combination; strengthen internal supervision and improve internal governance mechanism continuously etc. |
