Scorecards, gateways and rankings: remuneration and conduct in financial services

Elizabeth Sheedy, Le Zhang, Dominik Steffan

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)
37 Downloads (Pure)

Abstract

We conduct a lab-in-the-field experiment with 318 finance professionals to investigate the effects of incentives on misconduct in the finance industry. We examine the inclusion of compliance, as well as transaction volumes, for determining performance pay. This is proposed by regulators to reduce misconduct, despite the inherent difficulty of measuring compliance. Relative to fixed remuneration, the performance pay structures that incorporate compliance measures produce significantly worse compliance outcomes with mixed results in terms of productivity gains. Anticipating relative peer information on both criteria leads to increased productivity; the number of participants choosing to consistently comply remains unchanged, but those who sometimes violate policy are less compliant.
Original languageEnglish
Pages (from-to)3239-3283
Number of pages45
JournalAccounting & Finance
Volume62
Issue number3
Early online date1 Dec 2021
DOIs
Publication statusPublished - Sept 2022

Bibliographical note

© 2021 The Authors. Accounting & Finance published by John Wiley & Sons Australia, Ltd on behalf of Accounting and Finance Association of Australia and New Zealand. Version archived for private and non-commercial use with the permission of the author/s and according to publisher conditions. For further rights please contact the publisher.

Keywords

  • Compliance
  • Gateway
  • Non-financial measures
  • Performance pay
  • Rankings

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