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Bankers’ Salaries: RBI Takes A Strong Step Forward
A much tighter monitoring of CEO performance at banks could usher in a sea-change in governance, writes TT Ram Mohan.
08 Mar 2019, 03:20 PM IST
Chief executive officer pay, in general, is not regulated but the pay of bank CEOs is. With good reason. Banks are highly leveraged – it would be common to find a bank operating at a debt-to-equity ratio of 30:1 whereas a non-bank company operating at a debt to equity ratio of 2:1 would be thought highly risky.When a firm operates at the sort of leverage that one finds in banking, managers have enormous incentives to take risky gambl...
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