TY - JOUR
T1 - Internal monitoring, regulation, and compensation of top executives in banks
AU - Ang, James S.
AU - Lauterbach, Beni
AU - Schreiber, Ben Z.
PY - 2001/12
Y1 - 2001/12
N2 - This paper examines the relation between incentive pay, monitoring, and regulatory requirements in banks. Using a one-period model with asymmetrical information between the bank owner and the top management team, as well as within the team itself, we show that (1) incentive pay increases the mutual-monitoring activity among top executives; (2) senior executives, especially the CEO, collect more incentive pay than their subordinates; and (3) bank regulations, such as capital adequacy (CAD) requirements, reduce the absolute amount of incentive pay granted to executives.
AB - This paper examines the relation between incentive pay, monitoring, and regulatory requirements in banks. Using a one-period model with asymmetrical information between the bank owner and the top management team, as well as within the team itself, we show that (1) incentive pay increases the mutual-monitoring activity among top executives; (2) senior executives, especially the CEO, collect more incentive pay than their subordinates; and (3) bank regulations, such as capital adequacy (CAD) requirements, reduce the absolute amount of incentive pay granted to executives.
KW - Bank regulation
KW - Executive compensation
KW - Non-CEO top executives
UR - http://www.scopus.com/inward/record.url?scp=0347708937&partnerID=8YFLogxK
U2 - 10.1016/s1059-0560(01)00094-6
DO - 10.1016/s1059-0560(01)00094-6
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AN - SCOPUS:0347708937
SN - 1059-0560
VL - 10
SP - 325
EP - 335
JO - International Review of Economics and Finance
JF - International Review of Economics and Finance
IS - 4
ER -