Compensation committees in European banks: an effectiveness analisys

The remuneration committees have currently undergone an important reformwhich has made them the focal point in the governance of Top management incentive-payments. The aim of this work is to investigate the scope of this change in the banking sector and to verify, by means of an «effectiveness rating», how those bodiesare improving their operation. The analysis shows the high diffusion of such committees,despite their yet strongly improvable effectiveness. At the same time the studyshows which characteristics of committees mainly affect the effectiveness rating andwhich economic dimensions are associated with a higher quality of their action.