FDIC Improvement Act and corporate governance of commercial banks
This paper examines provisions of the FDIC Improvement Act related to corporate governance of banks. These provisions focus on the composition and independence of the audit committee and on increased regulatory influence over executive compensation. The composition of audit committees for a sample of banking firms for 1990 is compared with those of industrial firms and with the provisions of FDICIA. The findings suggest only minor differences between banks and other firms; however, under FDICIA provisions, large changes in the composition of bank audit committees are likely. Provisions related to compensation have focused on CEOs. To address this issue, I compare the 1990 levels and factors explaining differences in CEO compensation for a sample of banks and industrial firms. The findings suggest that bank CEOs earn slightly less than their industrial counterparts and that cross-sectional differences in CEO compensation in banking and other industries are explained by similar factors.
Volume (Year): (1993)
Issue (Month): ()
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- Rosenstein, Stuart & Wyatt, Jeffrey G., 1990. "Outside directors, board independence, and shareholder wealth," Journal of Financial Economics, Elsevier, vol. 26(2), pages 175-191, August.
- Weisbach, Michael S., 1988. "Outside directors and CEO turnover," Journal of Financial Economics, Elsevier, vol. 20(1-2), pages 431-460, January.
- Chun I. Lee & Stuart Rosenstein & Nanda Rangan & Wallace N. Davidson III, 1992. "Board Composition and Shareholder Wealth: The Case of Management Buyouts," Financial Management, Financial Management Association, vol. 21(1), Spring.
- White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May.
- Jensen, Michael C & Murphy, Kevin J, 1990.
"Performance Pay and Top-Management Incentives,"
Journal of Political Economy,
University of Chicago Press, vol. 98(2), pages 225-64, April.
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