Incentive Compensation for Bank Directors: The Impact of Deregulation
AbstractAlthough deregulation leads to changes in the duties of boards of directors, little is known about changes in their incentives. U.S. banking deregulation and associated changes during the 1990s lends itself to a natural experiment. These industry shocks forced bank directors to face expanded opportunities, increased competition, and an expanding market for corporate control. While bank directors received significantly less equity-based compensation throughout most of the 1990s, by 1999, their use of such compensation is indistinguishable from a matched sample of industrial firms. Our results suggest firms respond to deregulation by improving internal monitoring through aligning directors' and shareholders' incentives.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by University of Chicago Press in its journal Journal of Business.
Volume (Year): 78 (2005)
Issue (Month): 5 (September)
Contact details of provider:
Web page: http://www.journals.uchicago.edu/JB/
Other versions of this item:
- David A. Becher & Terry L. Campbell II & Melissa B. Frye, 2003. "Incentive compensation for bank directors: the impact of deregulation," Proceedings 871, Federal Reserve Bank of Chicago.
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Alessandro Carretta & Vincenzo Farina & Paola Schwizer, 2010. "Assessing effectiveness and compliance of banking boards," Journal of Financial Regulation and Compliance, Emerald Group Publishing, vol. 18(4), pages 356-369, November.
- David VanHoose, 2010. "Regulation of Bank Management Compensation," NFI Policy Briefs 2010-PB-06, Indiana State University, Scott College of Business, Networks Financial Institute.
- Livne, Gilad & Markarian, Garen & Milne, Alistair, 2011. "Bankers' compensation and fair value accounting," Journal of Corporate Finance, Elsevier, vol. 17(4), pages 1096-1115, September.
- Livne, Gilad & Markarian, Garen & Mironov, Maxim, 2013. "Investment horizon, risk, and compensation in the banking industry," Journal of Banking & Finance, Elsevier, vol. 37(9), pages 3669-3680.
- Nogata, Daisuke & Uchida, Konari & Goto, Naohisa, 2011. "Is corporate governance important for regulated firms' shareholders?: Evidence from Japanese mergers and acquisitions," Journal of Economics and Business, Elsevier, vol. 63(1), pages 46-68, January.
- Crutchley, Claire E. & Minnick, Kristina, 2012. "Cash versus incentive compensation: Lawsuits and director pay," Journal of Business Research, Elsevier, vol. 65(7), pages 907-913.
- Elijah Brewer, III & William Curt Hunter & William E. Jackson, III, 2004. "Investment opportunity set, product mix, and the relationship between bank CEO compensation and risk-taking," Working Paper 2004-36, Federal Reserve Bank of Atlanta.
- Zhilan Feng & Chinmoy Ghosh & C. Sirmans, 2007. "Director Compensation and CEO Bargaining Power in REITs," The Journal of Real Estate Finance and Economics, Springer, vol. 35(3), pages 225-251, October.
- Farrell, Kathleen A. & Friesen, Geoffrey C. & Hersch, Philip L., 2008. "How do firms adjust director compensation?," Journal of Corporate Finance, Elsevier, vol. 14(2), pages 153-162, April.
- Ghosh, Chinmoy & Petrova, Milena, 2013. "Does deregulation induce competition in the market for corporate control? The special case of banking," Journal of Banking & Finance, Elsevier, vol. 37(12), pages 5220-5235.
- Shin-Rong Shiah-Hou & Chin-Wei Cheng, 2012. "Outside director experience, compensation, and performance," Managerial Finance, Emerald Group Publishing, vol. 38(10), pages 914-938, October.
- Adams, Renée B. & Ferreira, Daniel, 2008. "Do directors perform for pay?," Journal of Accounting and Economics, Elsevier, vol. 46(1), pages 154-171, September.
- Becher, David A. & Frye, Melissa B., 2011. "Does regulation substitute or complement governance?," Journal of Banking & Finance, Elsevier, vol. 35(3), pages 736-751, March.
- S. Certo & Catherine Dalton & Dan Dalton & Richard Lester, 2008. "Boards of Directorsâ€™ Self Interest: Expanding for Pay in Corporate Acquisitions?," Journal of Business Ethics, Springer, vol. 77(2), pages 219-230, January.
- Eva Jansson, 0. "Deregulation, property rights, and legal system," European Journal of Law and Economics, Springer, vol. 0, pages 1-25.
- Li, Li & Song, Frank M., 2013. "Do bank regulations affect board independence? A cross-country analysis," Journal of Banking & Finance, Elsevier, vol. 37(8), pages 2714-2732.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journals Division).
If references are entirely missing, you can add them using this form.