The transparency of remuneration policy in financial holding companies based on the example of the UniCredit Group

Agata Wieczorek ()
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Agata Wieczorek: University of Lodz

Journal of Banking Regulation, 2022, vol. 23, issue 2, No 5, 173-198

Abstract: Abstract This study seeks to examine the level of transparency of remuneration policy in financial holding companies (FHCs) using the example of the UniCredit Group, as well as to identify the factors that affect its level. It will also indicate to what extent international recommendations on remuneration policy transparency have been implemented into national legal regulations and codes of best practice. Using data collected on the basis of annual reports of financial institutions that belong to the UniCredit Group from 2005 to 2018, I found that the UniCredit Group’s remuneration policy has a low level of transparency. Although the dominant bank discloses all information required by international recommendations and regulations, the subsidiary banks’ disclosures are kept to a minimum. The study also showed that the level of transparency (measured by the remuneration policy transparency index) is influenced by all the governance characteristics examined (the size of the bank’s board, the appointment of independent directors in the bank’s board, the frequency of meetings of the remuneration committee, and the direct involvement of the shareholder) and firm characteristics (the size of the bank and the financial performance measured by ROE). The study also showed that not all countries have decided to implement international recommendations on remuneration policy into their legal regulations and codes of best practice (this is especially true for countries outside the European Union).

Keywords: Transparency; Remuneration policy; Corporate governance; Financial holding company; Financial sector (search for similar items in EconPapers)
JEL-codes: G2 G34 G38 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1057/s41261-021-00155-3

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