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Top executive pay in Spanish banking system

Published online by Cambridge University Press:  28 August 2014

Idoya Ferrero-Ferrero ,
María Ángeles Fernández-Izquierdo  and
María Jesús Muñoz-Torres
Idoya Ferrero-Ferrero*
Affiliation:
Department of Finance and Accounting, Universitat Jaume I, Castellón de la Plana, Spain
María Ángeles Fernández-Izquierdo
Affiliation:
Department of Finance and Accounting, Universitat Jaume I, Castellón de la Plana, Spain
María Jesús Muñoz-Torres
Affiliation:
Department of Finance and Accounting, Universitat Jaume I, Castellón de la Plana, Spain
*
Corresponding author: ferrero@cofin.uji.es
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Abstract

This study examines consistency between compensation systems and corporate performance. The main purpose is to analyse how the performance has affected the short-term executive pay in Spanish banking system during the period 2004–2008. The main results reveal that pay-performance sensitivity is asymmetrical regarding the sign of the variation of the performance, since the pay-performance sensitivity is greater when the variation of the results is positive than when the variation of the results is negative. This finding is consistent with the managerial power theory and calls into question the role of the pay-performance incentives to align interest of executives and shareholders.

Keywords

top executive payperformanceSpanish banking systemfinancial crisiscorporate governance
Type
Research Article
Information
Journal of Management & Organization , Volume 20 , Issue 3 , May 2014 , pp. 333 - 347
Copyright
Copyright © Cambridge University Press and Australian and New Zealand Academy of Management 2014 

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