Managerial Compensation, Ownership Structure and Firm Performance in China's Listed Firms

Gary G. Tian, University of Wollongong
Xiao Fei Pan, University of Wollongong
Qingliang Tang
Aelee Jun, University of Wollongong
Shiguang Ma, University of Wollongong

Article comments

Pan, X., Tian, G. G., Ma, S., Jun, A. & Tang, Q. (2009). Managerial Compensation, Ownership Structure and Firm Performance in China's Listed Firms. Asian Finance Association (AsianFA) International Conference (pp. 1-32). Brisbane: UQ Business School (UQBS).

Abstract

This paper investigates managerial compensation and its relationship with firm performance in China's listed firms. In China, the largest shareholder dominates other shareholders, controls the firm and therefore exercises substantial impacts on manager compensation. After controlling for other firm and industry characteristics, we find that manager remuneration is greater and pay-performance relation is stronger for privately-controlled firms than for state-controlled firms. We also document that state-controlled firms exercise performance-based manager incentive schemes, which is contrary to evidence found in some earlier studies. Our results also indicate that top executives in firms with a foreign ownership are more highly compensated, relative to those without foreign ownership.