Executive remuneration policy at banks in Poland after the financial crisis: Evolution or revolution?

• Published in: Comparative economic research. Central and Eastern Europe Vol. 17; no. 2; pp. 25 - 44
• Main Authors: Słomka-Gołębiowska, Agnieszka, Urbanek, Piotr
• Format: Journal Article
• Language: English
• Published: Warsaw De Gruyter 01.06.2014; De Gruyter Open; University of Łódź; Lodz University Press
• Subjects: banki; Banking industry; banking sector; Banks; Committees; Compensation; compensation policy; Corporate governance; Disclosure; Economic crisis; Economics; Evolution; Executives; financial crisis; Financial institutions; Financial services; International finance; kryzys finansowy; Legal norms; Pay; Performance evaluation; Poland; polityka wynagradzania; Public companies; Regulation; Risk; Senior management; ład korporacyjny
• ISSN: 2082-6737; 1508-2008; 2082-6737
• DOI: 10.2478/cer-2014-0012

The executive remuneration policy of financial institutions has been indicated as one of the key factors that led to the recent financial crisis. As a consequence a number of legislative initiatives and best practices have been imposed,aimed at strengthening existing and creating new standards of good corporate governance at banks. The purpose of this article is to assess the effectiveness of Poland's new regulations concerning banks' executive pay, which were introduced in the aftermath of the recent financial crisis. The research results indicate that the new legal rules have not been fully enforced. Public banks in Poland are not fulfilling the reporting obligations imposed by law and international principles. Given the crucial importance of executive remuneration policy in the financial sector to the stability of the banking sector, the inability to evaluate the progress made in the adjustment of executive remuneration practices to the new regulations may be perceived as one of the important risk factors that has not been effectively eliminated or even reduced in Poland yet.