Trends and convergence analysis of executive remuneration in the Indian banking industry Online publication date: Thu, 02-Feb-2023
by Madhur Bhatia; Rachita Gulati
International Journal of Corporate Governance (IJCG), Vol. 13, No. 2, 2022
Abstract: This paper empirically examines the trends and convergence in the remuneration of executive directors in the Indian banking industry and across bank groups from 2005 to 2018. The study adopts Barro et al 's (1991) σ- and β-concepts of convergence in the dynamic panel econometric specification and Phillips and Sul's (2007, 2009) club clustering algorithm to investigate the convergence in executives' remuneration. The empirical results show evidence of β-convergence in remuneration paid to bank executives, implying the existence of a catching-up phenomenon in pay levels in the Indian banking industry and across ownership groups. However, a significant decline in the dispersion in executive pay is not observed. The club convergence identifies two convergent clubs and one divergent club in the industry with a considerably huge gap in the average pay across clubs. Our study offers sound policy implications to promote ongoing governance reforms toward an optimal pay-setting process.
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Corporate Governance (IJCG):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email subs@inderscience.com
Our Blog 
Follow us on Twitter 
Visit us on Facebook