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Ekonomia i Prawo. Economics and Law

THE IMPACT OF REGULATIONS ON EXECUTIVE COMPENSATION IN THE US FINANCIAL INSTITUTIONS
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  • THE IMPACT OF REGULATIONS ON EXECUTIVE COMPENSATION IN THE US FINANCIAL INSTITUTIONS
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THE IMPACT OF REGULATIONS ON EXECUTIVE COMPENSATION IN THE US FINANCIAL INSTITUTIONS

Authors

  • Agnieszka Słomka-Gołębiowska Szkoła Główna Handlowa, Katedra Międzynarodowych Studiów Porównawczych

DOI:

https://doi.org/10.12775/EiP.2014.014

Keywords

corporate governance, executive compensation, banks, US, path dependency

Abstract

        The purpose of this article is to present the path dependence of regulation as an important engine of evolution of executive compensation in the US financial institutions. In particular, the impact of regulations, including tax laws, accounting principles and disclosure requirements of public companies on the practice of rewarding executives of the US banks is examined. The regulatory changes contributed to the fact that executive compensations since 90s. are the highest in the world due to commonly used stock options that are the largest component of executive pay. Combining no accounting expense on the company’s books, but a large deduction for tax purposes stock options virtually exploded. The dynamic rise of executive compensation was not halt by routinely expanded by SEC disclosure requirements. The regulations, developed in good faith, caused a number of unintended and costly side effects. The nature of regulation introduced in the United States was more disciplining than constructive due to the fact that they were initiated by politicians who are guided by a political agenda rather than the value for bank's shareholders and other stakeholders.

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Ekonomia i Prawo. Economics and Law

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Published

2014-03-31

How to Cite

1.
SŁOMKA-GOŁĘBIOWSKA, Agnieszka. THE IMPACT OF REGULATIONS ON EXECUTIVE COMPENSATION IN THE US FINANCIAL INSTITUTIONS. Ekonomia i Prawo. Economics and Law. Online. 31 March 2014. Vol. 13, no. 1, pp. 175-194. [Accessed 7 July 2025]. DOI 10.12775/EiP.2014.014.
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Vol. 13 No. 1 (2014)

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