arbiter
JournalsPricingAccount

CEO Pay Gap and Bank Risk: Evidence from Listed Commercial Banks in China

Ning Ding et al.

Spanish Accounting Review / Revista de Contabilidad2025https://doi.org/10.6018/rcsar.601811article
AJG 1ABDC B
Weight
0.37

What the paper says

This paper investigates the influence of the chief executive officer (CEO) pay gap on bank risk in a distinct corporate governance context where CEO compensation is exclusively limited to a cash-based salary plus a bonus. A sample of 37 Chinese listed banks from 2010 to 2022 uses a fixed effect regression model. Consistent with the tournament theory, the authors conjecture that the CEO pay gap (CPG), measured by the pay gap (PGAP) and the CEO pay slice (CPS), is significantly and positively associated with bank risk, measured by the inverse z-score. Results reveal heterogeneity, with a notable positive effect evident in the subsets of non-state-owned and large banks. The study results have been extensively validated through several robustness checks, including alternate measures of the CPG, bank risk, the 2SLS-IV approach, and excluding the COVID-19 period. The paper has important implications for unique corporate governance systems, such as those that prevail in the Chinese banking system, where the results may inform and influence corporate practices and regulatory decisions. Este artículo investiga la influencia de la brecha salarial del director ejecutivo (CEO) sobre el riesgo bancario en un contexto distinto de gobierno corporativo donde la remuneración del CEO se limita exclusivamente a un salario en efectivo más una bonificación. Una muestra de 37 bancos chinos que cotizan en bolsa entre 2010 y 2022 utiliza un modelo de regresión de efectos fijos. De acuerdo con la teoría del torneo, los autores conjeturan que la brecha salarial de los CEO (CPG), medida por la brecha salarial (PGAP) y la porción salarial de los CEO (CPS), está significativa y positivamente asociada con el riesgo bancario, medido por la inversa z- puntaje. Los resultados revelan heterogeneidad, con un notable efecto positivo evidente en los subconjuntos de bancos grandes y no estatales. Los resultados del estudio se han validado ampliamente mediante varias comprobaciones de solidez, incluidas medidas alternativas de la GPC, el riesgo bancario, el enfoque 2SLS-IV y excluyendo el período COVID-19. El documento tiene implicaciones importantes para sistemas únicos de gobierno corporativo, como los que prevalecen en el sistema bancario chino, donde los resultados pueden informar e influir en las prácticas corporativas y las decisiones regulatorias.

1 citation

Open paper page →

Cite this paper

https://doi.org/https://doi.org/10.6018/rcsar.601811

Or copy a formatted citation

@article{ning2025,
  title        = {{CEO Pay Gap and Bank Risk: Evidence from Listed Commercial Banks in China}},
  author       = {Ning Ding et al.},
  journal      = {Spanish Accounting Review / Revista de Contabilidad},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.6018/rcsar.601811},
}

Paste directly into BibTeX, Zotero, or your reference manager.

Flag this paper

CEO Pay Gap and Bank Risk: Evidence from Listed Commercial Banks in China

Flags are reviewed by the Arbiter methodology team within 5 business days.

Evidence weight

0.37

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.16 × 0.4 = 0.06
M · momentum0.53 × 0.15 = 0.08
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.