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Determinants of Compensation in the Financial Services Industry

Author

Listed:
  • Patrick Kampkoetter

    (University of Cologne)

Abstract

We provide an extensive overview of the determinants of the fixed and variable compensation schemes in the German and Swiss financial services industry. We find that the financial crisis had a deep impact on the proportion of variable pay to fixed salary; this impact was caused by large individual bonus cuts. The results also show that fixed compensation packages are highly standardized between banks, whereas bonus payments are more strongly related to differences between individuals. In Germany, bonuses vary to a higher extent across companies, whereas in Swiss banks, the differences are almost negligible when adding firm controls.

Suggested Citation

  • Patrick Kampkoetter, 2012. "Determinants of Compensation in the Financial Services Industry," Cologne Graduate School Working Paper Series 03-12, Cologne Graduate School in Management, Economics and Social Sciences.
  • Handle: RePEc:cgr:cgsser:03-12
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    File URL: http://www.cgs.uni-koeln.de/fileadmin/wiso_fak/cgs/pdf/working_paper/cgswp_03-12.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    compensation; wage; bonus payments; financial crisis;

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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