Post-crisis regulation and CEO bonuses
by Vittoria Cerasi, Sebastian M. Deininger, Leonardo Gambacorta, Tommaso Oliviero, VoxEu.org
Since 2011, the Financial Stability Board (FSB) has implemented compensation principles and standards for executives and material risk-takers in many financial institutions. This column presents evidence that banks in jurisdictions that adopted them changed their compensation policies more than other banks. Compensation in these banks is less linked to short-term profits and more linked to risk, and the CEOs of risky banks now receive less in bonuses and other variable compensation than their peers at less risky banks.
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