Kleymenova, A and Tuna, I (2021) Regulation of Compensation and Systemic Risk: Evidence from the UK. Journal of Accounting Research, 59 (3). pp. 1123-1175. ISSN 0021-8456
Abstract
This paper studies the consequences of regulating executive compensation at financial institutions by examining the introduction of the UK Remuneration Code in 2010, which aimed to change the decision‐making horizon and risk‐taking incentives of bank executives. We find that, although both banks and non‐banks show increased contribution and sensitivity to systemic risk in the UK post‐2010, this increase is lower for UK banks, in line with the intent of the regulation. However, UK banks also experience higher unforced CEO turnover when compared to other UK firms. Therefore, while the regulation may have had the desired effect on systemic risk, it may also have given rise to some unintended consequences.
More Details
Item Type: | Article |
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Subject Areas: | Accounting |
Additional Information: |
© 2021 Wiley
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Funder Name: | European Research Council |
Date Deposited: | 11 Mar 2021 15:38 |
Date of first compliant deposit: | 11 Mar 2021 |
Subjects: |
United Kingdom Executive recruitment Pay incentives Government economic controls and regulations |
Last Modified: | 30 Sep 2024 00:48 |
URI: | https://lbsresearch.london.edu/id/eprint/1714 |