Abstract
This article contributes to the international corporate governance literature by examining factors that affect CEO compensation in China. The article develops models of CEO pay based on an understanding of the unique economic and structural reforms undertaken by the privatized State Owned Enterprises. The findings show that CEO compensation depends, in part, on the firm's operating profits and this indicates that incentive systems are being used to motivate top managers. Corporate governance factors have a significant impact on CEO compensation, but they do so in ways that differ from those in other countries. The conclusions are robust across different formulations of the basic model and they have public policy implications for China and other transitional economies that are moving away from state ownership of business enterprises.
| Original language | English |
|---|---|
| Pages (from-to) | 776-785 |
| Number of pages | 10 |
| Journal | Journal of Business Research |
| Volume | 60 |
| Issue number | 7 |
| DOIs | |
| Publication status | Published - 1 Jul 2007 |
Bibliographical note
The authors thank Jean McGuire and three anonymous reviewers whose helpful comments and suggestions greatly improved the paper. The authors also thank Kevin Chen, Charles Chen, and participants at a Hong Kong Polytechnic University Workshop for helpful comments on earlier versions of the paper.Funding
The authors also acknowledge financial support from a Hong Kong SAR Competitive Earmarked Research Grant (LU 5403/05H).
Keywords
- Ownership; Board structure; Executive compensation