Abstract

http://ssrn.com/abstract=1910996
 


 



Institutional Ownership and Executive Compensation: Evidence from U.S. Banks During the Financial Crisis


Huiqi Gan


Virginia Commonwealth University (VCU) - School of Business

Lisa Victoravich


University of Denver - Daniels College of Business

Tracy Xu


University of Denver

August 16, 2011

AAA 2012 Management Accounting Section (MAS) Meeting Paper

Abstract:     
This paper examines the relation between institutional ownership and the compensation of executives at U.S. banking firms during the financial crisis period. We find that the monitoring role of institutional investors in shaping executive pay is different at banking firms than at general firms. We find that total executive compensation is increasing with institutional investors with potential business relations with the banking firms and decreasing with more independent institutional investors. Guardian funds such as foundations and trusts are the most effective monitors in terms of controlling the level of compensation. We also find evidence that specific types of institutional investors have different preferences for executive compensation mix (i.e., options vs. cash) and that this preference varies by type of executive (i.e. chief executive officer vs. chief financial officer).

Number of Pages in PDF File: 33

Keywords: Institutional investor ownership, executive compensation, corporate governance, banks

JEL Classification: G30, G34

working papers series


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Date posted: August 17, 2011  

Suggested Citation

Gan , Huiqi and Victoravich, Lisa and Xu, Tracy, Institutional Ownership and Executive Compensation: Evidence from U.S. Banks During the Financial Crisis (August 16, 2011). AAA 2012 Management Accounting Section (MAS) Meeting Paper. Available at SSRN: http://ssrn.com/abstract=1910996 or http://dx.doi.org/10.2139/ssrn.1910996

Contact Information

Huiqi Gan
Virginia Commonwealth University (VCU) - School of Business ( email )
Richmond, VA 23284-4000
United States
Lisa Victoravich (Contact Author)
University of Denver - Daniels College of Business ( email )
2101 S. University Blvd.
Denver, CO 80208
United States
Tracy Xu
University of Denver ( email )
Denver, CO 80208-2685
United States
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