Abstract: The primary purpose of this study is to examine the viability of two basic theories of compensation to explain executive compensation in the banking industry. The two executive compensation motivation theories are sales/sales growth maximization and profit/shareholder wealth maximization. Overall, strong support is found for both theories. This research also seeks to significantly expand, compared to previous research, the number of banks investigated. This study succeeds, with over a four-fold increase in the number of banks analyzed, including over 330 banks not previously used in the literature. This investigation is further motivated by the paucity of banking studies on compensation and that recent banking compensation research ignores the sales/sales growth maximization theory. This study tests three different definitions of CEO compensation. They are total compensation, annual cash compensation, and options awarded. The period of time under investigation is 1998--2004. The primary source of bank CEO compensation data is SNL Financial L.P., which breaks down compensation into its component parts of base salary, bonus, other cash compensation, non-cash compensation, and value of options granted. Standard and Poor's Research Insight (Compustat North America) provides the source for the various market-based and accounting-based performance measures used in this study. A one-way, fixed-effects, unbalanced panel model is used to analyze the data. In summary, when using the entire data set, this study strongly supports the viability of both theories of CEO compensation for each of the three tested definitions of CEO pay. Next, the data set is split into larger banks, representative of bank samples of earlier research, and smaller banks, previously excluded from research. These two sub-samples of banks yielded very different pay-performance linkages when analyzing total pay and option pay. In general, for the larger banks, less support is found for the profit or shareholder wealth maximization theory. In this research, scale of operations dominates other linkages between pay and performance. Smaller banks show stronger linkages to pay than larger banks.