Bank CEO compensation incentives and risk-taking: evidence of 2007-2008 financial tsunami

• Main Authors: Huey-Shiuan Shen, 沈蕙萱
• Other Authors: I-Ju Chen
• Format: Others
• Language: en_US
• Online Access: http://ndltd.ncl.edu.tw/handle/d2r94s

碩士 === 元智大學 === 財務金融暨會計碩士班(財務金融學程) === 103 === This study analyzes the relationship between CEO compensation incentives and risk-taking of commercial banks surrounding the period of financial tsunami. We investigate the impact of different CEO compensation schemes on risk-taking behavior of commercial banks during the financial tsunami. We find that increase in CEO compensation incentive will higher the possibility of default risk of commercial banks post financial tsunami. This may due to the reason that CEO becomes more risk-taking by aligning them with higher proportion of CEO compensation under the sluggish economic environment post financial crisis. Moreover, we find that risk-taking behavior significantly affects bank performance.