Izvorni znanstveni članak
https://doi.org/10.1080/1331677X.2020.1867214
Executive remuneration, corporate governance and corporate performance: Evidence from China
Ajid ur Rehman
Tayyab Ali
Shahzad Hussain
Abdul Waheed
Sažetak
This study investigates the impact of corporate performance and
corporate governance on executive remuneration in a Chinese
market setting. Using Generalized Method of Moments (GMM)
estimation approach for a sample of 860 non-financial firms listed
on Chinese Stock Exchanges over the 15 years period of
2004–2018, the study found a positive and significant association
between corporate profitability and executive pay. The study further reports that ownership concentration is positively related to
executive pay revealing an entrenchment effect i.e., collusion
between large shareholders and top management. Consistent
with managerial power and agency theory CEO duality exhibits a
positive relationship with executive remuneration, while board
size and board independence also reveal a positive association
with executive pay, indicating board ineffectiveness in reducing
managerial entrenchment. Interestingly, non-state-owned enterprises report a negative relationship of board size with executive
remuneration which means non-state-owned enterprises with
larger board size tend to reduce executive pay because they may
have better control and monitoring. Following the managerial
power propositions, CEO duality weakens the performance sensitivity of executive pay, but contrary to agency theory the impact
of board independence on this sensitivity is in contrast and weakens the relationship of managerial pay and performance, making
the independent director’s role ambiguous.
Ključne riječi
Executive remuneration; corporate performance; corporate governance; Chinese firms
Hrčak ID:
301474
URI
Datum izdavanja:
31.12.2021.
Posjeta: 1.702 *