Research On The Relationship Between Listed Commercial Banks Performance And Salary Incentive Mechanism

Profitability is the core competitiveness of an enterprise,as a special enterprise of business risk,the performance of commercial bank's operational risk must be its core competitiveness.With the full opening of China's financial market,the deepening of financial reform,China's commercial banks are facing increasingly fierce market competition environment.The new business and its risks are both opportunities and challenges to the banking industry.It is the primary task to strengthen the control and management of the risks and obtain the maximum benefits.How to reasonably allocate the benefits to motivate the value creation of all employees and enhance the profitability of banks is an important issue for the bank managers.At present,the incentive system of listed commercial banks in our country is not reasonable,and the corporate governance structure is not perfect,which greatly weakens the enthusiasm of employees' participation in risk management.To establish a reasonable salary incentive,improve the corporate governance structure,enhance the competitiveness of China's commercial banks,the CBRC issued the "Commercial Bank Supervisory Guidelines on sound compensation"(2010)and "commercial bank corporate governance guidelines"(2013),to guide the establishment of the bank employee compensation mechanism which is matched with the operating performance,to encourage banks to pursue long-term returns under the control of risk.The research on the relationship between employee compensation and risk-adjusted bank performance provides an effective theoretical basis for improving the incentive mechanism of China's commercial banks.This article first introduces the theoretical basis for the incentive constraints mechanism and performance evaluation of commercial banks,then based on China Merchants Bank,Shanghai Pudong Development Bank,Minsheng Bank data from 2002 to 2015,as well as other 10 listed commercial banks from 2007 to 2015,the data are calculated to get the EVA rate of return,Commercial Banks are divided into three types of state-owned commercial Banks,small and medium-sized joint-stock commercial Banks,urban commercial Banks,based on the introduction of the comprehensive performance evaluation index REVA,the author first set up three groups of two-way SUR model to do transverse comparison using three kinds of listed commercial Banks' panel data between 2007-2015,second choose China Merchants Bank,Minsheng Bank,Shanghai pudong development bank' economic data in 2002-2015 to establish OLS model with a virtual variable for the longitudinal analysis to study the relationship between bank risk-adjusted performance indicators of REVA and salary incentive for employees,to test the effectiveness of compensation incentive mechanism.The results show that salary incentive effect of the State-owned commercial banks is negative,employee compensation and risk-adjusted performance has a positive correlation in the small and medium-sized joint-stock,city commercial bank,salary incentive system is effective;After the implementation of the Basel Agreement III,the sample bank incentive compensation has been significantly strengthened.Therefore,to improve the performance of banks and enhance their competitiveness,it is an unavoidable theme to improve the corporate governance structure of listed banks in china.