Question

This paper examines CEO pay in the banking industry and the effect of deregulating the market for corporate control. Using panel data on 147 banks over the 1980s, we find higher levels of pay in competitive corporate control markets, i.e., those in which interstate banking is permitted. We also find a stronger pay-performance relation in deregulated interstate banking markets. Finally, CEO turnover increases substantially after deregulation. These results provide evidence of a managerial talent market — one which matches the level and structure of pay with the competitiveness of the banking environment.

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Answer 1

The competativeness of a given business environment, retaining talents and the pay structure are closely related.Competitiveness of the banking structure, needless to say require talent management,as long as it is fair,easy to keep staff on board.Talent management is nothing less than a science of using human resource planning strategically to improve the value of the business environment.

Talent management is the key to achieving business objectives.With the deregulation of the banking sector,it has become more competitative,so is the requirement for competitive talents.Everything that is done to recruit,retain,develop,reward and to make people perform,all forms a part of talent management.

In all economic conditions optimization of the performance is required,and there is high value to talent management i.e having more competitiveness in the organisation of concern and motivating them for higher level of performance.So managed effectively,talent management offers significant potential to improve sustainable organisational performance and there are evidences in plenty around the decisions while designing talent systems.