On Incentive Contracts for Client Managers in Banks——The Choice of Performance Measurement and the Realization of Long-term Incentive Contract
Li Xing · Journal of Xiangtan University · 2008
Banks are hardly to evaluate their own total profits,therefore it is unable to use the total profits as the function to assess the efforts made by agents.As an incentive contract,the deposits amount is usually treated as the agents' performance measurement which is invalid however.With the creative system,in order to evaluate the client managers by simulant profit,banks should establish a merit system centralizing on the risk adjusted return of capital so that they could achieve the long-term incentives.