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The FDICIA and bank CEOs' pay-performance relationship: an empirical investigation

  • Ying Yan
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    A look at how the FDICIA changes the relationship between pay and performance for bank CEOs. It finds that the legislation improves healthy banks’ growth opportunities, making their CEOs’ total compensation less sensitive to performance. For unhealthy banks, total compensation becomes more performance-sensitive.

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    File URL: http://www.clevelandfed.org/research/workpaper/1998/wp9805.pdf
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    Paper provided by Federal Reserve Bank of Cleveland in its series Working Paper with number 9805.

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    Date of creation: 1998
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    Handle: RePEc:fip:fedcwp:9805
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    1. Gary Gorton & Richard Rosen, 1992. "Corporate Control, Portfolio Choice, and the Decline of Banking," NBER Working Papers 4247, National Bureau of Economic Research, Inc.
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    8. Garen, John E, 1994. "Executive Compensation and Principal-Agent Theory," Journal of Political Economy, University of Chicago Press, vol. 102(6), pages 1175-99, December.
    9. George J. Benston & George G. Kaufman, 1997. "FDICIA after Five Years," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 139-158, Summer.
    10. Kim, Daesik & Santomero, Anthony M, 1988. " Risk in Banking and Capital Regulation," Journal of Finance, American Finance Association, vol. 43(5), pages 1219-33, December.
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    12. Michael C. Jensen & Kevin J. Murphy, 1990. "Ceo Incentives - It'S Not How Much You Pay, But How," Journal of Applied Corporate Finance, Morgan Stanley, vol. 3(3), pages 36-49.
    13. Smith, C.W. & Watts, R.L., 1992. "The Investment Oppotunity set and Corporate Financing, Dividend and Compensation Policies," Papers 92-02, Rochester, Business - Financial Research and Policy Studies.
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    17. Berger, Philip G & Ofek, Eli & Yermack, David L, 1997. " Managerial Entrenchment and Capital Structure Decisions," Journal of Finance, American Finance Association, vol. 52(4), pages 1411-38, September.
    18. Ciscel, David H & Carroll, Thomas M, 1980. "The Determinants of Executive Salaries: An Econometric Survey," The Review of Economics and Statistics, MIT Press, vol. 62(1), pages 7-13, February.
    19. Sherwin Rosen, 1990. "Contracts and the Market for Executives," NBER Working Papers 3542, National Bureau of Economic Research, Inc.
    20. Shrieves, Ronald E. & Dahl, Drew, 1992. "The relationship between risk and capital in commercial banks," Journal of Banking & Finance, Elsevier, vol. 16(2), pages 439-457, April.
    21. DeGennaro, Ramon P. & Thomson, James B., 1995. "Anticipating bailouts: The incentive-conflict model and the collapse of the Ohio deposit guarantee fund," Journal of Banking & Finance, Elsevier, vol. 19(8), pages 1401-1418, November.
    22. Paul, Jonathan M, 1992. "On the Efficiency of Stock-Based Compensation," Review of Financial Studies, Society for Financial Studies, vol. 5(3), pages 471-502.
    23. Crawford, Anthony J & Ezzell, John R & Miles, James A, 1995. "Bank CEO Pay-Performance Relations and the Effects of Deregulation," The Journal of Business, University of Chicago Press, vol. 68(2), pages 231-56, April.
    24. Myers, Stewart C., 1977. "Determinants of corporate borrowing," Journal of Financial Economics, Elsevier, vol. 5(2), pages 147-175, November.
    25. Haubrich, Joseph G, 1994. "Risk Aversion, Performance Pay, and the Principal-Agent Problem," Journal of Political Economy, University of Chicago Press, vol. 102(2), pages 258-76, April.
    26. William P. Osterberg & James B. Thomson, 1990. "Optimal financial structure and bank capital requirements: an empirical investigation," Working Paper 9007, Federal Reserve Bank of Cleveland.
    27. John, Teresa A & John, Kose, 1993. " Top-Management Compensation and Capital Structure," Journal of Finance, American Finance Association, vol. 48(3), pages 949-74, July.
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