We investigate the (unintended) effects of bank executive compensation regulation. Capping the share of variable … compensation did not induce an executive director exodus from EU banking because banks raised fixed compensation sufficiently to … retain executives. However, risk-adjusted bank performance deteriorated, consistent with reduced incentives to exert effort …

We study if the regulation of bank executive compensation has unintended consequences. Based on novel data on CEO and … to abandon the industry. Banks indemnified executives sufficiently for the shock to retain them by raising fixed and … lowering variable compensation while complying with the cap. At the same time, banks' risk-adjusted performance deteriorated …

(long-term incentive) for commercial banks (conventional and Islamic banks) in MENA countries. Specifically, we take board … Islamic banks in testing these relationships. Using a sample of 65 banks in MENA countries for the period between 2009 and … CEO, leading them to achieve higher financial performance. The Islamic bank's business model (based on Shari'ah principles …

significantly higher average turnover rates but also finds that they are driven by CEOs at poorly performing banks. Banks …, we do not find any reduction in risk-taking at the bank level, one purported aim of the regulation …

. Our model delivers two predictions. First, managers have an incentive to reduce the correlation between deferred … compensation and company stock in bad times. Second, managers that reduce such a correlation take on more risk in bad times. Using …

, generally implicit assumption that managers cannot undo their incentive packages, (ii) the standard modeling practice of … motives in managers' portfolio choices. …

banks over the 2007–2018 period. The finding is robust to the risk measures (Z-score, systematic risk and stock return … analysis suggests that bank past performance (captured by return on equity) strongly moderates the relationship between … executive compensation and risk-taking. We also find a modest U-shaped association of bank Z-score with executive compensation …