Using a three-way mixed effects model to quantify firm-manager match effects in executive compensation, we find that unobservable match heterogeneity explains a considerable proportion of the compensation variation. Firms compensate managers for productivity generated by the efficient match, so...

In this Article we submit that the compensation structures at banks before the financial crisis were not necessarily flawed and that recent reforms in this area largely reflect already existing best practices. In Part I we review recent empirical studies on corporate governance and executive pay...

We investigate the effect of managerial incentives and market power on bank risk-taking for a sample of 212 large US bank holding companies over 1997-2004 (i.e. 1,534 observations). Bank managers have incentives to prefer less risk while bank shareholders have preference for ‘excessive' risk....

Key points:• This article considers how the recent market turmoil affected national banking systems, thereby prompting state measures;• It describes the remuneration problems shown by the financial crisis: rewards for failure; short-term behaviour; inappropriate design of performance...

I examine how the debt covenant structure of a firm varies with managerial risk-taking incentives via CEO compensation sensitivities to stock return volatility (Vega). I build a comprehensive firm debt covenant index by including both public and private debt issues. I find a robust negative...

We investigate the effects of managerial incentives and market power on bank risk-taking for a sample of 212 large U.S. bank holding companies over the period 1997-2004 (comprising 1,534 observations). Bank managers have incentives to prefer less risk, while bank shareholders prefer higher risk,...

The paper outlines the developments in the EU regulatory framework for executive remuneration since 2004 and going through the financial crisis. It also presents the results of an analysis of the remuneration practices adopted by the largest European listed firms before and after the crisis,...

The roles of bank franchise value (“skin in the game”) and CEO ownership play in determining bank risk are studied for large United States Bank Holding Companies. We find robust evidence of a U-shaped relationship between bank risk and each of CEO ownership and franchise value, indicating...

This study examines the implications of CEO power on the board structure of banks in the Ghanaian banking industry. Using a unique hand-collected dataset in respect of 21 commercial banks in Ghana for the 2009 – 2017 periods, the results show that CEO power underscores the absence or lack of...