Trends in Executive Compensation Across Bank Types

Shaker Ahmed, Denis Davydov, Sami Vähämaa

Research output: Chapter in Book/Report/Conference proceedingChapterScientificpeer-review

Abstract

In this chapter, we present a descriptive analysis of executive compensation in U.S. banks over the period 1992-2018. Specifically, using detailed data on the compensation of the Chief Executive Officers (CEOs) of the S&P 1500 banks, we examine the development trends in the level and structure of bank CEO compensation over time. Moreover, we also assess differences in CEO compensation levels and structures across banking organizations with different types of business models. Our key findings can be summarized as follows: (1) The level of CEO total compensation varies considerably over time. (2) The total compensation of bank CEOs decreased substantially around the global financial crisis and has not yet exceeded the pre-crisis levels despite the systematic increase over the last decade. (3) Bonuses and other types of incentive compensation items comprise a vast proportion of bank CEO compensation. (4) The base salary of bank CEOs has remained relatively constant over time. (5) Both the level and the composition of CEO compensation differ across bank types with the CEOs of investment banks having the highest pay and the highest proportion of performance-based compensation items after controlling for bank size, capital ratio, and financial performance. (6) The structure of bank CEOs’ incentive compensation has largely shifted from options towards restricted stock in the aftermath of the financial crisis.
Original languageEnglish
Title of host publicationResponsible Finance and Digitalization: Implications and Developments
Place of PublicationLondon
PublisherRoutledge
Publication date2022
Edition1
Pages24-45
ISBN (Print)9780367700614
DOIs
Publication statusPublished - 2022
MoE publication typeA3 Book chapter

Fingerprint

Dive into the research topics of 'Trends in Executive Compensation Across Bank Types'. Together they form a unique fingerprint.

Cite this