TAILIEUCHUNG - Bank return volatility and management structure

This study investigates the dynamic relationship between bank management structure, payment contract and bank return volatility. We find that increasing the sensitivity of executives pay to equity risk will increase bank return volatility. When CEOs are also the chairs of board directors, bank risk is higher. As banks expand more risky investments, the risk level of the banks is higher. These results hold not only for commercial banks but also for savings and loan institutions. | Journal of Applied Finance Banking vol. 4 no. 6 2014 191-199 ISSN 1792-6580 print version 1792-6599 online Scienpress Ltd 2014 Bank Return Volatility and Management Structure Xiaolou Yang1 and Gang Peng2 Abstract This study investigates the dynamic relationship between bank management structure payment contract and bank return volatility. We find that increasing the sensitivity of executives pay to equity risk will increase bank return volatility. When CEOs are also the chairs of board directors bank risk is higher. As banks expand more risky investments the risk level of the banks is higher. These results hold not only for commercial banks but also for savings and loan institutions. JEL classification number G20 G21 Keywords Bank governance Return volatility Payment structure 1 Introduction The aim of the management structure is to align executives self-interest and investors wealth maximization therefore executive compensation structure is viewed as an important device for bank management. In the current literature very little attention has been paid to the management structure in banking industry and how the bank management structure affects bank return volatilities. To date the empirical evidence of how certain management structures affect banks performance is mixed and provides litter coherent evidence for the shape of an optimal management structure. For example Lambert et al. 1993 and Boyd 1994 document a positive relationship between CEO compensation and the percentage of the board composed of outside directors whereas Finkelstein and Hambrick 1989 find that compensation is unrelated to the percentage of outside directors on the board. Other characteristics of the board have also been explored. Hallock 1997 finds that CEO compensation is higher for firms with interlocked outside directors. Lambert et al. 1993 find that CEOs receive higher pay when they have appointed a greater proportion of the board. Crystal 1991 argues that boards of directors are .

• Ngân hàng - Tín dụng
• Bank governance
• Return volatility
• Payment structure
• Management structure
• Bank return volatility
• Summary of Doctoral thesis
• Loans portfolio governance
• Joint stock commercial bank
• Foreign trade of Vietnam
• Loan portfolio governance at Vietcombank
• Journa science
• International journal of financial research
• Corporate governance
• Bank performance
• Board of director
• Performance in Vietnamese
• Commercial banks
• Bank performance
• Capital adequacy ratio
• Board composition
• Financial institutions
• Board strategy
• Regulatory policy
• Management infrastructure
• Financial stability
• Bank size
• Regulatory capital
• Credit exposure
• Bank funding
• hazardous effects
• nanomaterials derived
• protein aggregation
• reflect disparities
• individual resources
• privileged backgrounds
• involvement represents
• enlarging lymph
• lymphadenopathy
• affected followed
• Multifocal involvement
• inguinal lymph
• Volatile Constituents
• Herbal Medicines
• Gas Chromatography
• Designing Novel Functional
• Chromatography
• Chemical Composition
• Abdominal tuberculosis
• joint tuberculosis
• disseminated tuberculosis
• categorized under
• involving deeply
• located inaccessible
• Establishment
• Biogeographic Areas
• Distributing Endemic
• Dominican Republic
• Biogeography
• Intertidal Barnacles
• Bank credit
• Financial crisis
• Credit expansion
• Created resource misallocation and over capacity
• medicine prices increase
• respiratory infection
• chronic diseases
• Stress Induced
• Phytaspase Connection
• Membrane H+ ATPase
• Board of directors