臺大管理論叢 NTU Management Review VOL.29 NO.1

293 NTU Management Review Vol. 29 No. 1 Apr. 2019 reported in panel A. Our results generally indicate that CEO incentives significantly affected bank performance. Banks with higher CEO incentives, measured by cash bonuses, equity dollar incentives, and equity risk exposure, tended to have higher operating performance. This pattern existed for both S&P 1,500 and non-S&P 1,500 banks. We also observed that the effect of cash bonus incentives and equity incentives on bank performance became less significant after the financial crisis. Our results support Fahlenbrach and Stulz’s (2011) idea that higher CEO incentives encourage banks to take riskier investment projects to achieve better performance. The incentive schemes worked in normal economic situations, but became less significant when banks encountered major and sudden changes in the business environment.