Title

Incentive compensation for bank directors: The impact of deregulation

Authors

Authors

D. A. Becher; T. L. Campbell;M. B. Frye

Comments

Authors: contact us about adding a copy of your work at STARS@ucf.edu

Abbreviated Journal Title

J. Bus.

Keywords

BOARD COMPOSITION; EXECUTIVE-COMPENSATION; CORPORATE PERFORMANCE; GOVERNANCE STRUCTURE; INSURANCE INDUSTRY; OWNERSHIP; PAY; ACQUISITIONS; CEO; CONSEQUENCES; Business

Abstract

Although deregulation leads to changes in the duties of boards of directors, little is known about changes in their incentives. U. S. banking deregulation and associated changes during the 1990s lends itself to a natural experiment. These industry shocks forced bank directors to face expanded opportunities, increased competition, and an expanding market for corporate control. While bank directors received significantly less equity-based compensation throughout most of the 1990s, by 1999, their use of such compensation is indistinguishable from a matched sample of industrial firms. Our results suggest firms respond to deregulation by improving internal monitoring through aligning directors' and shareholders' incentives.

Journal Title

Journal of Business

Volume

78

Issue/Number

5

Publication Date

1-1-2005

Document Type

Article

Language

English

First Page

1753

Last Page

1777

WOS Identifier

WOS:000232977700005

ISSN

0021-9398

Share

COinS