The role of the compensation committee at banks in Poland
Journal Title: Zarządzanie i Finanse - Year 2013, Vol 11, Issue 2
Abstract
The view that independence of compensation committee is important to promote shareholders interest has been reflected in most of the local corporate governance codes. Since the onset of the financial crisis from 2007–2009 the rules entered into the mandatory provisions of law for banks, despite the fact that the results of empirical research are not stable. The aim of the paper is to ascertain the impact of independent compensation committee on executive compensation procedures based on the hand-collected data from the bank's financial accounts for the period 2005–2011. The empirical results show that executive compensation at banks listed in Poland as well as a pay-performance sensitivity are not dependent on the presence of independent members on the compensation committee. However, having a mandate of the chairman of the compensation committee by an independent board member significantly reduces the expenditure on executive compensation. Taking into account that the compensation committee is a relatively new institution of corporate governance at banks in Poland, only the most important person in the committee – the chairperson – can restrain the discretionary activities of the blockholder, who holds a great deal of sway in designing the executive compensation.
Authors and Affiliations
Agnieszka Słomka-Gołębiowska
Keywords
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- EP ID EP110458
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