Work detail

Relationship between Executive Compensation and Bank Performance of TARP Recipients

Author: Mgr. Marta Zamrazilová
Year: 2011 - summer
Leaders: doc. Petr Janský Ph.D.
Consultants:
Work type: Finance, Financial Markets and Banking
Masters
Language: English
Pages: 97
Awards and prizes:
Link:
Abstract: The objective of this diploma thesis is to examine the relationship between
executive compensation and bank performance. We study the executive pay structure
of the U.S. largest 100 bank holding companies during period 2002-2009. Our data
analysis describes differences between behaviour of TARP recipients and the banks
that did not receive state financial help with consideration of financial crisis effect. We
use econometric model to test the dependence of bank performance measures and
particular elements of executive remuneration – total sum, bonus, stock award and
option award. The relationship is generally considered as weak, but we also find
linkage between TARP recipients’ compensation and Market Capitalisation and on the
other hand non-TARP bank appeared to define compensation according to earning per
share. A special attention is devoted to executive remuneration structures of TARP
recipients with weakest results and their comparison with Dodd-Frank Financial
Reform Act and TARP standards.

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