An empirical examination of the determinant of the US financial CEOs’ compensation for the post-financial crisis period

Eunsup Daniel Shim, Jooh Lee

Research output: Contribution to journalArticle

Abstract

The US financial crisis of 2008 and subsequent Global Financial Crisis were considered by many economists the worst financial crisis since the Great Depression of the 1930s. As a results, Dodd-Frank Act has passed and aims “(1) to promote the financial stability of the United States by improving accountability and transparency in the financial system, to end “too big to fail”, (2) to protect the American taxpayer by ending bailouts, (3) to protect consumers from abusive financial services practices, and for other purposes.”*** The enactment of Dodd-Frank Act, in part, intended to significantly influence accountability on executive compensation especially for the financial institutions.

This paper empirically investigates the changes in Financial CEOs’ compensation since the Financial Crisis of 2008. Our findings show that in the post-Financial Crisis period financial leverage is significant factor influencing the CEOs’ total compensation. In addition market based performance such as stock price and market-to-book ratio shows significant positive relationship with CEO compensation. This change can be interpreted an attempt to reduce opportunistic behavior of top executives after the financial crisis and the enactment of the Dodd-Frank Act.

Original languageEnglish (US)
Pages (from-to)251-258
Number of pages8
JournalCorporate Ownership and Control
Volume12
Issue number1 Continued 2
StatePublished - Jan 1 2014

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Financial crisis
CEO compensation
Enactment
Accountability
Financial institutions
Bailouts
Too big to fail
Stock market
Financial services
Chief executive officer
Stock prices
Economists
Transparency
Opportunistic behavior
Global financial crisis
Financial system
Executive compensation
Great Depression
Influencing factors
Financial leverage

All Science Journal Classification (ASJC) codes

  • Business, Management and Accounting(all)

Cite this

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An empirical examination of the determinant of the US financial CEOs’ compensation for the post-financial crisis period. / Shim, Eunsup Daniel; Lee, Jooh.

In: Corporate Ownership and Control, Vol. 12, No. 1 Continued 2, 01.01.2014, p. 251-258.

Research output: Contribution to journalArticle

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