Corporate governance and bank capitalization strategies

D. Anginer, Asli Demirguc-Kunt, Harry Huizinga, K. Ma

Research output: Contribution to journalArticleScientificpeer-review

24 Citations (Scopus)

Abstract

This paper examines the relationship between banks’ capitalization strategies and their corporate governance and executive compensation schemes for an international sample of banks over the 2003–2011 period. Shareholder-friendly corporate governance, in the form of a separation of the CEO and chairman of the board roles, intermediate board size, and an absence of anti-takeover provisions, is associated with lower bank capitalization, consistent with shareholder incentives to shift risk towards the financial safety net. Higher values of executive option and stock wealth invested in the bank are associated with higher capitalization as a potential reflection of executive risk aversion, but the risk-taking incentives embedded in executive compensation packages are associated with lower capitalization.
Original languageEnglish
Pages (from-to)1-27
JournalJournal of Financial Intermediation
Volume26
DOIs
Publication statusPublished - Apr 2016

Keywords

  • bank capital
  • dividend payouts
  • corporate governance
  • executive compensation

Fingerprint Dive into the research topics of 'Corporate governance and bank capitalization strategies'. Together they form a unique fingerprint.

Cite this