Disproportional ownership structure and pay–performance relationship: Evidence from China's listed firms |
| |
| Authors: | Jerry Cao Xiaofei Pan Gary Tian |
| |
| Institution: | 1. School of Business Administration and Economics, The College at Brockport, State University of New York, Brockport, NY 14420, USA;2. School of Business, State University of New York at Oswego, Oswego, NY 13126, USA;3. Department of Finance, School of Management, Fudan University, Shanghai, China;1. Leeds University Business School, University of Leeds, Maurice Keyworth Building, Leeds LS2 9JT, United Kingdom;2. IE Business School, IE University, María de Molina 12, Madrid 28006, Spain;3. European Corporate Governance Institute, Brussels, Belgium;4. Cardiff Business School, Cardiff University, Aberconway Building, Colum Drive, Cardiff CF10 3EU, United Kingdom;5. School of Management, Swansea University, Bay Campus, Fabian Way, Swansea SA1 8EN, United Kingdom |
| |
| Abstract: | This paper examines the impact of ownership structure on executive compensation in China's listed firms. We find that the cash flow rights of ultimate controlling shareholders have a positive effect on the pay–performance relationship, while a divergence between control rights and cash flow rights has a significantly negative effect on the pay–performance relationship. We divide our sample based on ultimate controlling shareholders' type into state owned enterprises (SOE), state assets management bureaus (SAMB), and privately controlled firms. We find that in SOE controlled firms cash flow rights have a significant impact on accounting based pay–performance relationship. In privately controlled firms, cash flow rights affect the market based pay–performance relationship. In SAMB controlled firms, CEO pay bears no relationship with either accounting or market based performance. The evidence suggests that CEO pay is inefficient in firms where the state is the controlling shareholder because it is insensitive to market based performance but consistent with the efforts of controlling shareholders to maximize their private benefit. |
| |
| Keywords: | |
| 本文献已被 ScienceDirect 等数据库收录！ |
|
