Executive bonuses clawback in the banking sector
Journal Title: Business Ethics and Leadership (BEL) - Year 2017, Vol 1, Issue 1
Abstract
The current post-crisis era in most world countries motivates business entities to focus on improving of risk governance functions. It is mostly concerned to banks because of risky nature of their busi-ness. Before global financial crisis the executive compensation in most banks was excessive, that, in turn, led to systemic risk growth. According to transaction cost theory corporate governance is fo-cused at effective performance of banking transactions. In connection with the above-stated thesis the important task at the time is improving the system of executive remuneration in order to ensure the moderate bank risk level. With this aim in 2008 Swiss bank UBS has implemented new compensation system that assumes the clawback provision. This clause concerning the deferred awards of senior managers’ remuneration was included to increase their accountability for loss-creating or fraud behav-ior. The paper investigates the aftermath of clawback of executive compensation implementation in the biggest European banks and discusses the specific features of the reformed remuneration system amongst financial institutions. Furthermore, after implementation of the clawback provision in leading banks of Europe similar practice has been started in financial institutions of USA, features of which is researched in the paper.
Authors and Affiliations
Olga Afanasyeva
Keywords
Related Articles
- EP ID EP452752
- DOI 10.21272/bel.1(1).25-33.2017
- Views 178
- Downloads 0
Central bank transparency: cross-country comprehension (example of inflation reports)
Implementation of inflation targeting strategy by the central bank is connected with the public announcement of inflation targets and central bank’s obligation to achieve these goals. The main element of the central bank...
Moderating Effects of Contextual and Individual Factors on the Relationship between Cultural Precedents and Marketing-Related Norms
This paper discusses the effect of corporate culture precedents (i.e., job satisfaction, training, organizational justice, and ethical leadership) on marketing norms acceptance or violation (i.e., unethical practices of...
The situation of graduate employees on the Hungarian labor market
Our paper presents the labor market situation of graduate career starter in Hungary based on empirical data (randomly distributed questionnaires of 202 employees). The objective of the research was to survey how this lit...
The Examination of Appearance of Income Inequality in Scientific Databases with Content Analysis
Our modern world society applies widely – but not nearly in generally – the principle that all human beings are equal, or at least should be equal. There used to be and still are societies heavily burdened by inequalitie...
Business Ethics in Providing Financial Statements: The Testing of Fraud Pentagon Theory on the Manufacturing Sector in Indonesia
The article studies the causes and consequences of manipulating the financial statements of companies, identifies the most influential drivers of fraudulent reporting actions by employees and business owners. This resear...