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- Title
How executive remuneration responds to guidance: evidence from the Australian banking industry.
- Authors
Magee, Shane; Ng, Cheok Man; Wright, Sue
- Abstract
This study investigates whether executive remuneration responds to regulatory guidance. Using an exogenous shock in the form of a regulatory guideline issued by the Australian Prudential Regulation Authority to the Australian banking industry, we analyse whether remuneration is more aligned to prudent risk‐taking since the guideline was published. We find that remuneration to both chief executive officers and the top five highest paid executives was adjusted to be more consistent with the guideline from its first year of operation. These findings are robust to the introduction of the Two Strikes Rule as an alternative explanation.
- Subjects
BANKING industry; WAGES; CHIEF executive officers; EXECUTIVES
- Publication
Accounting & Finance, 2021, Vol 61, Issue 4, p5281
- ISSN
0810-5391
- Publication type
Article
- DOI
10.1111/acfi.12758