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Die Vergütung des Führungspersonals deutscher Großbanken, 1871–1913

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This paper describes and analyses level, structure, and development of executive remuneration of board members and deputy board members of large German joint-stock credit banks using principal-agent theory. Between 1871 and 1913, executives received an average real income of about 100,000 Mark. About 70 percent of it were profit shares. A profit increase by one percent increased the executive remuneration by about 1.2 percent. This strong incentive related pay might be seen as a solution to the principal-agent problem.

A statistical investigation shows that the starting level of executive remuneration positively depends on firm size. Furthermore, it shows that profit shares and risk costs of banks are negatively correlated. This suggests that incentive related pay improved the risk allocation in the banking sector.

Language: German

Document Type: Research Article

Publication date: 2005-07-01

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  • Founded in 1903, Vierteljahrschrift für Sozial- und Wirtschaftsgeschichte is the oldest German periodical of social and economic history. The international, peer-reviewed journal features original articles in German, English, French and Italian.

    Today, VSWG is edited by Günther Schulz, Jörg Baten, Markus A. Denzel, Gerhard Fouquet and Hans Pohl and deals with all aspects of social history, social developments from the Middle Ages to today, as well as history of finance and economic history.

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