How Post-crisis Regulation Has Affected Bank CEO Compensation

Vittoria Cerasi, Sebastian M. Deininger (), Leonardo Gambacorta and Tommaso Oliviero ()
Additional contact information
Sebastian M. Deininger: Basel Chamber of Commerce, http://www.csef.it/Scognamiglio

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: This paper assesses whether compensation practices for bank Chief Executive Officers (CEOs) changed after the Financial Stability Board (FSB) issued post-crisis guidelines on sound compensation. Banks in jurisdictions which implemented the FSB’s Principles and Standards of Sound Compensation in national legislation changed their compensation policies more than other banks. Compensation in those jurisdictions is less linked to short-termprofits and more linked to risks, with CEOs at riskier banks receiving less, by way of variable compensation, than those at less-risky peers. This was particularly true of investment banks and of banks which previously had weaker risk management, for example those that previously lacked a Chief Risk Officer.

Keywords: Banks; Managerial compensation; Prudential regulation; Risk-taking (search for similar items in EconPapers)
JEL-codes: G21 G28 G32 (search for similar items in EconPapers)
Date: 2018-03-07
New Economics Papers: this item is included in nep-ban, nep-cba, nep-hrm and nep-law
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Published in Journal of International Money and Finance, vol. 104, June 2020, pp. 102-153.

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http://www.csef.it/WP/wp493.pdf (application/pdf)

Related works:
Journal Article: How post-crisis regulation has affected bank CEO compensation (2020)
Working Paper: How post-crisis regulation has affected bank CEO compensation (2018)
Working Paper: How post-crisis regulation has affected bank CEO compensation (2017)
Working Paper: How post-crisis regulation has affected bank CEO compensation (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:sef:csefwp:493

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