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Bank Fundamentals, Executive Compensation and Public Perception of Banks in Australia

journal contribution
posted on 2014-09-01, 00:00 authored by Ameeta JainAmeeta Jain, John GuoJohn Guo, Chien-Ting Lin
Public perception of banks in Australia is relatively poor compared to firms in other major services sectors. This study explores a number of potential sources of negative public opinion. We find that bank profits are similar to firms in other sectors after adjustment for firm size. Average bank executive remuneration as a proportion of total staff costs are also lower than those in other sectors. Finally, Australian banks not only pay a higher average effective tax rate than their counterparts in OECD countries but are also closest to their statutory corporate tax rates. Our findings therefore suggest that poor public perception of banks is based on the flawed claims of generating excessive profits, overpaying bank executives, and underpaying taxes and is not justified.

History

Journal

Economic Papers

Volume

33

Issue

3

Pagination

220 - 232

ISSN

0812-0439

eISSN

1759-3441

Publication classification

C Journal article; C1 Refereed article in a scholarly journal

Copyright notice

2014, Wiley

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