This survey investigated the relationship between executive compensation and the financial performance of companies. It is hypothesized that a company can utilize its pay system to direct executives＇ efforts toward i...This survey investigated the relationship between executive compensation and the financial performance of companies. It is hypothesized that a company can utilize its pay system to direct executives＇ efforts toward its strategic business objectives, thus contributing to higher levels of corporate financial performance. The survey data consisted of a secondary and non-probabilistic sample of 44 Brazilian industrial companies. In order to operationalize the independent remuneration variable, the authors used average monthly salary, average variable salary, and three indices that were created for this survey： benefits, career, and development. These indices measure the access to benefits, mechanisms for stimulating and supporting careers, and mechanisms to encourage education and professional development that companies offer to their directors, vice presidents, and chief executive officers （CEOs）, who are referred to in this paper by the term ＂executive＂. The remuneration data are from fiscal year 2006. In order to operationalize the financial performance variable, two accounting indicators were used： sales growth and return on equity （ROE） for fiscal years 2006 and 2007. The size of the companies was used as a control variable. The results of a multiple regression analysis do not support the hypothesis that there is a positive and significant relationship between executive compensation and corporate financial performance.展开更多
This paper examines the relations between the disciplinary role of Japanese relationship-oriented corporate governance mechanisms, such as keiretsu memberships and bank-appointed directors, and pay for performance sen...This paper examines the relations between the disciplinary role of Japanese relationship-oriented corporate governance mechanisms, such as keiretsu memberships and bank-appointed directors, and pay for performance sensitivity in Japan. Previous studies show that pay for performance sensitivity of Japanese executive compensation is positive and almost the same as in a market-oriented system like that of the United States of America （USA）. However, previous studies do not investigate how Japanese corporate governance mechanisms like financial keiretsu ties and bank-appointed directors affect pay for performance sensitivity. This paper finds that the disciplinary mechanism of keiretsu memberships and bank-appointed monitors did not function well in Japan in the 1990s.展开更多
This study selected 473 local research articles on executive compensation from core journals in the China Academic Journals(CNKI)full-text database and the Chinese Social Sciences Citation Index(CSSCI)from 2003 to 202...This study selected 473 local research articles on executive compensation from core journals in the China Academic Journals(CNKI)full-text database and the Chinese Social Sciences Citation Index(CSSCI)from 2003 to 2020.Then,the bibliometric analysis method was adopted and conducted in regard to the number of articles published,authors,research institutions,high-frequency keywords,etc.In view of the increasing studies of this field,this study showed that a few scholars and institutions with high academic influence have been involved in the research on executive compensation gap in China.The results from this study revealed that the research on the relationship between executive compensation gap and firm performance as well as the moderating variables between them were topics of interests.In the context of the increasing compensation gap which had become a global interest,the research on management power and promotion incentives have established their significance as important research frontiers.展开更多
In the context of differentiated governance and the deepening market-oriented reform of compensation in China,we divide state-owned enterprises(SOEs)into four categories according to their equity structure,namely abso...In the context of differentiated governance and the deepening market-oriented reform of compensation in China,we divide state-owned enterprises(SOEs)into four categories according to their equity structure,namely absolute hold-ing firms,relative holding firms,major impact firms and equity participation firms,to examine the current situation and effectiveness of differentiated gov-ernance for executive compensation.We report four main findings.First,exec-utive compensation levels,compensation gaps and equity incentives increase as government control decreases,indicating the emergence of differentiated gov-ernance of executive compensation in SOEs.Second,the driving force behind differentiated compensation is the government’s willingness to intervene in SOEs.The government’s ability to intervene in SOEs is not diminished by reduced equity control,and the government may even compensate for such a reduction by appointing excess executives.Third,differentiated governance of compensation is more prominent in local and competitive SOEs,while equity incentives lag significantly behind salary levels and salary gap incen-tives.Fourth,differentiated governance of compensation levels and gaps are effective in reducing agency problems and enhancing innovation in SOEs;how-ever,the impact of equity incentives is limited.These findings enrich the liter-ature on the differentiated governance of SOEs and facilitate a more comprehensive understanding of executive incentive and compensation con-tracts in Chinese SOEs.展开更多
We analyze 228 executive compensation contracts voluntarily disclosed by Chinese listed firms and find that central-government-controlled companies disclose more information in executive compensation contracts than lo...We analyze 228 executive compensation contracts voluntarily disclosed by Chinese listed firms and find that central-government-controlled companies disclose more information in executive compensation contracts than localgovernment-controlled and non-government-controlled companies. Cashbased payments are the main form of executive compensation, whereas equity-based payments are seldom used by Chinese listed companies. On average, there are no significant differences in the value of basic salaries and performance-based compensation in executive compensation contracts.But, compared with their counterparts in non-government-controlled companies, executives in government-controlled companies are given more incentive compensation. Accounting earnings are typically used in executive compensation contracts, with few firms using stock returns to evaluate their executives. However, the use of non-financial measures has increased significantly since 2007.展开更多
This study investigates how the mandatory adoption of International Financial Reporting Standards(IFRS) affects the contractual benefits of using accounting information to determine executive compensation in China. Af...This study investigates how the mandatory adoption of International Financial Reporting Standards(IFRS) affects the contractual benefits of using accounting information to determine executive compensation in China. After controlling for firm and corporate governance characteristics, we find strong evidence supporting the positive role of mandatory IFRS adoption on the accounting-based performance sensitivity of executive compensation. Subsample analysis suggests that improvements in accounting-based performance sensitivity after IFRS adoption differ across regions with various levels of institutional quality and across firms that are affected to a different extent by the adoption. Additional analysis supports the argument that the positive effects of IFRS adoption on the use of accounting performance in executive compensation are driven by the reduction in accounting conservatism associated with IFRS adoption.展开更多
Since the commencement of industrial reform in Chinna, most CHinese state-owneu enterprises have adopted a deferred executive compensation policy to provide incentives for their management teams. However, the effectiv...Since the commencement of industrial reform in Chinna, most CHinese state-owneu enterprises have adopted a deferred executive compensation policy to provide incentives for their management teams. However, the effectiveness of such a policy needs to be evaluated In this paper, we specify a model of deferred executive compensation policy, in which the compensation for executives is contingent on firms ＇future revenue. The model suggests that under deferred executive compensation policies, managers exhibit an increasing level of effort in every period Furthermore, the deferred compensation policy encourages managers to make long-term investments, which might generate revenue even after the termination of managerial contracts.展开更多
This article focuses on the impact of emotions on Tunisian chief executive officer （CEO） compensation. It examines specifically the role of executives＇ emotional intelligence （El） level and their emotional biases...This article focuses on the impact of emotions on Tunisian chief executive officer （CEO） compensation. It examines specifically the role of executives＇ emotional intelligence （El） level and their emotional biases, namely optimism in explaining compensation plans. An empirical study was conducted in this respect, by using a questionnaire as a method of data collection, on a sample of 100 Tunisian companies＇ leaders. This research paper translates an original approach, since it highlights the behavioral aspects role in explaining the CEO＇s compensation policy level. To the best of the knowledge, this represents the first study in the Tunisian context that explored this area of research. Actually, the results show that Tunisian leaders may be subject to certain emotions thereby impacting their compensation characteristics. Indeed, they opt at first to contribute to the organizational performance by establishing a mutual trust within the organizational structure in order to achieve the objectives already set up. However, this could be done at the expense of their compensation plans展开更多
Compliance,as a very important aspect of corporate governance,has developed earlier in the world,while China's compliance management has developed relatively late and is currently lacking in development.However,ma...Compliance,as a very important aspect of corporate governance,has developed earlier in the world,while China's compliance management has developed relatively late and is currently lacking in development.However,many enterprises suffer serious losses without compliance management,especially import and export enterprises,which are forced to exit the market due to poor compliance management.This article is based on the urgent need of Chinese enterprises for compliance management,but the lack of research by scholars.It summarizes the literature on the factors affecting compliance,hoping to be helpful for the study of compliance management.展开更多
According to optimal contracting theory, compensation contracts are effective in solving the agency problem between stockholders and managers. Executive compensation is naturally related to firm performance. However, ...According to optimal contracting theory, compensation contracts are effective in solving the agency problem between stockholders and managers. Executive compensation is naturally related to firm performance. However, contracts are not always perfect. Managers may exert influence on the formulation and implementation of compensation contracts by means of their managerial power. As fair value has been introduced into the new accounting standards in China, new concerns have arisen over the relationship between profits and losses from changes in fair value(CFV) and levels of executive compensation.In this study, we find that executive compensation is significantly related to CFV. However, this sensitivity is asymmetric in that increases to compensation due to profits from changes in fair value(PCFV) are higher than reductions to compensation due to losses from changes in fair value(LCFV). Furthermore,we find that managerial power determines the strength of this asymmetry.展开更多
This paper selects the A-share non-financial listed companies in China from 2007 to 2018 as the research object to study the impact of science and technology policy on enterprise innovation and its influence mechanism...This paper selects the A-share non-financial listed companies in China from 2007 to 2018 as the research object to study the impact of science and technology policy on enterprise innovation and its influence mechanism,and further explore the effectiveness boundary of science and technology policy.The results show that there is a significant positive correlation between science and technology policy and executive compensation;there is a significant positive correlation between technology policy and enterprise innovation;there is a significant positive correlation between science and technology policy and enterprise innovation;executive compensation plays a partial intermediary effect between technology policy and enterprise innovation.Further research on the effectiveness boundary of science and technology policy shows that:first,management power can strengthen the positive correlation between science and technology policy and executive compensation;second,regional factors have a greater impact on the relationship between science and technology policy and enterprise innovation.The ethnic regions and western regions with poor economic development level weaken the positive incentive effect of science and technology policies on enterprise innovation.展开更多
In this paper, we hand-collect the performance measures adopted in performance-vested stock option plans in China. We find that return on equity （ROE） is a widely used performance measure. Different from most of the...In this paper, we hand-collect the performance measures adopted in performance-vested stock option plans in China. We find that return on equity （ROE） is a widely used performance measure. Different from most of the other performance measures, ROE is affected by the number of shares outstanding. When executive compensation contracts are explicitly tied to ROE performance, in order to avoid the reduction in reported ROE through the issuance of additional common shares （i.e., ROE dilution）, managers have an incentive to influence ROE performance through financing decisions. We find that managers are more likely to avoid ROE dilution related to debt-versus-equity choice when their performance-vested stock option plans are explicitly tied to ROE performance and when firms have a high level of access to bank loans. However, there is no such link for firms with a low level of access to bank loans. Our study shows that the association between executive compensation design and corporate financing decisions depends on the accessibility of bank loans, demonstrating the importance of institutional factors in China. The results hold after controlling for potential endogeneity in executive compensation and corporate financing decisions. Our study contributes to both the executive compensation and corporate finance literature.展开更多
文摘This survey investigated the relationship between executive compensation and the financial performance of companies. It is hypothesized that a company can utilize its pay system to direct executives＇ efforts toward its strategic business objectives, thus contributing to higher levels of corporate financial performance. The survey data consisted of a secondary and non-probabilistic sample of 44 Brazilian industrial companies. In order to operationalize the independent remuneration variable, the authors used average monthly salary, average variable salary, and three indices that were created for this survey： benefits, career, and development. These indices measure the access to benefits, mechanisms for stimulating and supporting careers, and mechanisms to encourage education and professional development that companies offer to their directors, vice presidents, and chief executive officers （CEOs）, who are referred to in this paper by the term ＂executive＂. The remuneration data are from fiscal year 2006. In order to operationalize the financial performance variable, two accounting indicators were used： sales growth and return on equity （ROE） for fiscal years 2006 and 2007. The size of the companies was used as a control variable. The results of a multiple regression analysis do not support the hypothesis that there is a positive and significant relationship between executive compensation and corporate financial performance.
文摘This paper examines the relations between the disciplinary role of Japanese relationship-oriented corporate governance mechanisms, such as keiretsu memberships and bank-appointed directors, and pay for performance sensitivity in Japan. Previous studies show that pay for performance sensitivity of Japanese executive compensation is positive and almost the same as in a market-oriented system like that of the United States of America （USA）. However, previous studies do not investigate how Japanese corporate governance mechanisms like financial keiretsu ties and bank-appointed directors affect pay for performance sensitivity. This paper finds that the disciplinary mechanism of keiretsu memberships and bank-appointed monitors did not function well in Japan in the 1990s.
文摘This study selected 473 local research articles on executive compensation from core journals in the China Academic Journals(CNKI)full-text database and the Chinese Social Sciences Citation Index(CSSCI)from 2003 to 2020.Then,the bibliometric analysis method was adopted and conducted in regard to the number of articles published,authors,research institutions,high-frequency keywords,etc.In view of the increasing studies of this field,this study showed that a few scholars and institutions with high academic influence have been involved in the research on executive compensation gap in China.The results from this study revealed that the research on the relationship between executive compensation gap and firm performance as well as the moderating variables between them were topics of interests.In the context of the increasing compensation gap which had become a global interest,the research on management power and promotion incentives have established their significance as important research frontiers.
基金supported by the National Natural Science Foundation of China(Project Nos.72372168,72002223,71902191,72132010)in addition to financial support from the Natural Science Foundation of Guangdong Province(Project No.2022A1515011098).
文摘In the context of differentiated governance and the deepening market-oriented reform of compensation in China,we divide state-owned enterprises(SOEs)into four categories according to their equity structure,namely absolute hold-ing firms,relative holding firms,major impact firms and equity participation firms,to examine the current situation and effectiveness of differentiated gov-ernance for executive compensation.We report four main findings.First,exec-utive compensation levels,compensation gaps and equity incentives increase as government control decreases,indicating the emergence of differentiated gov-ernance of executive compensation in SOEs.Second,the driving force behind differentiated compensation is the government’s willingness to intervene in SOEs.The government’s ability to intervene in SOEs is not diminished by reduced equity control,and the government may even compensate for such a reduction by appointing excess executives.Third,differentiated governance of compensation is more prominent in local and competitive SOEs,while equity incentives lag significantly behind salary levels and salary gap incen-tives.Fourth,differentiated governance of compensation levels and gaps are effective in reducing agency problems and enhancing innovation in SOEs;how-ever,the impact of equity incentives is limited.These findings enrich the liter-ature on the differentiated governance of SOEs and facilitate a more comprehensive understanding of executive incentive and compensation con-tracts in Chinese SOEs.
基金the financial support of the National Natural Science Foundation of China(NSFC No.71272074)the Excellent Young Professors Program of the Shanghai Government
文摘We analyze 228 executive compensation contracts voluntarily disclosed by Chinese listed firms and find that central-government-controlled companies disclose more information in executive compensation contracts than localgovernment-controlled and non-government-controlled companies. Cashbased payments are the main form of executive compensation, whereas equity-based payments are seldom used by Chinese listed companies. On average, there are no significant differences in the value of basic salaries and performance-based compensation in executive compensation contracts.But, compared with their counterparts in non-government-controlled companies, executives in government-controlled companies are given more incentive compensation. Accounting earnings are typically used in executive compensation contracts, with few firms using stock returns to evaluate their executives. However, the use of non-financial measures has increased significantly since 2007.
基金sponsored by the National Natural Science Foundation of China (Nos. 71072036, 71102134 and 71272012)the MOE Project for Key Research Institutes of Humanities and Social Science in Universities (No. 00JJD630006)
文摘This study investigates how the mandatory adoption of International Financial Reporting Standards(IFRS) affects the contractual benefits of using accounting information to determine executive compensation in China. After controlling for firm and corporate governance characteristics, we find strong evidence supporting the positive role of mandatory IFRS adoption on the accounting-based performance sensitivity of executive compensation. Subsample analysis suggests that improvements in accounting-based performance sensitivity after IFRS adoption differ across regions with various levels of institutional quality and across firms that are affected to a different extent by the adoption. Additional analysis supports the argument that the positive effects of IFRS adoption on the use of accounting performance in executive compensation are driven by the reduction in accounting conservatism associated with IFRS adoption.
文摘Since the commencement of industrial reform in Chinna, most CHinese state-owneu enterprises have adopted a deferred executive compensation policy to provide incentives for their management teams. However, the effectiveness of such a policy needs to be evaluated In this paper, we specify a model of deferred executive compensation policy, in which the compensation for executives is contingent on firms ＇future revenue. The model suggests that under deferred executive compensation policies, managers exhibit an increasing level of effort in every period Furthermore, the deferred compensation policy encourages managers to make long-term investments, which might generate revenue even after the termination of managerial contracts.
文摘This article focuses on the impact of emotions on Tunisian chief executive officer （CEO） compensation. It examines specifically the role of executives＇ emotional intelligence （El） level and their emotional biases, namely optimism in explaining compensation plans. An empirical study was conducted in this respect, by using a questionnaire as a method of data collection, on a sample of 100 Tunisian companies＇ leaders. This research paper translates an original approach, since it highlights the behavioral aspects role in explaining the CEO＇s compensation policy level. To the best of the knowledge, this represents the first study in the Tunisian context that explored this area of research. Actually, the results show that Tunisian leaders may be subject to certain emotions thereby impacting their compensation characteristics. Indeed, they opt at first to contribute to the organizational performance by establishing a mutual trust within the organizational structure in order to achieve the objectives already set up. However, this could be done at the expense of their compensation plans
文摘Compliance,as a very important aspect of corporate governance,has developed earlier in the world,while China's compliance management has developed relatively late and is currently lacking in development.However,many enterprises suffer serious losses without compliance management,especially import and export enterprises,which are forced to exit the market due to poor compliance management.This article is based on the urgent need of Chinese enterprises for compliance management,but the lack of research by scholars.It summarizes the literature on the factors affecting compliance,hoping to be helpful for the study of compliance management.
基金supported by the Leading Academic Discipline Project from the Education Committee of Shanghai (Project No.J51701)the National Natural Science Foundation of China (Project No.70902063)+2 种基金the Humanities and Social Sciences Foundation of Ministry of Education of China (Project Nos.09YJC630157 and 12YJA790197)the Key Research and Innovation Project of Shanghai Municipal Education Commission (11ZS86)the IAPHD Project of Nanjing University
文摘According to optimal contracting theory, compensation contracts are effective in solving the agency problem between stockholders and managers. Executive compensation is naturally related to firm performance. However, contracts are not always perfect. Managers may exert influence on the formulation and implementation of compensation contracts by means of their managerial power. As fair value has been introduced into the new accounting standards in China, new concerns have arisen over the relationship between profits and losses from changes in fair value(CFV) and levels of executive compensation.In this study, we find that executive compensation is significantly related to CFV. However, this sensitivity is asymmetric in that increases to compensation due to profits from changes in fair value(PCFV) are higher than reductions to compensation due to losses from changes in fair value(LCFV). Furthermore,we find that managerial power determines the strength of this asymmetry.
基金supported by the National Natural Science Foundation of China under Grant No.72362001,titled'Compensation Incentive Mechanism of Accounting Firms:Theoretical Framework,Incentive Effect TestOptimization Reconstruction,'and the Guangxi Philosophy and Social Sciences Planning Project under Grant No.21BGL013,titled'Research on the Incentive Effects and Mechanisms of State-owned Capital Reverse Mixed Reform Promoting High-quality Development of Private Enterprises.
文摘This paper selects the A-share non-financial listed companies in China from 2007 to 2018 as the research object to study the impact of science and technology policy on enterprise innovation and its influence mechanism,and further explore the effectiveness boundary of science and technology policy.The results show that there is a significant positive correlation between science and technology policy and executive compensation;there is a significant positive correlation between technology policy and enterprise innovation;there is a significant positive correlation between science and technology policy and enterprise innovation;executive compensation plays a partial intermediary effect between technology policy and enterprise innovation.Further research on the effectiveness boundary of science and technology policy shows that:first,management power can strengthen the positive correlation between science and technology policy and executive compensation;second,regional factors have a greater impact on the relationship between science and technology policy and enterprise innovation.The ethnic regions and western regions with poor economic development level weaken the positive incentive effect of science and technology policies on enterprise innovation.
基金Bo Zhang acknowledges the financial support from the National Natural Science Foundation of China （no. 71402185）. Xiaoqiang Zhi acknowledges the financial support from the Research Project Special Support of National Accounting Leading Talents Program.
文摘In this paper, we hand-collect the performance measures adopted in performance-vested stock option plans in China. We find that return on equity （ROE） is a widely used performance measure. Different from most of the other performance measures, ROE is affected by the number of shares outstanding. When executive compensation contracts are explicitly tied to ROE performance, in order to avoid the reduction in reported ROE through the issuance of additional common shares （i.e., ROE dilution）, managers have an incentive to influence ROE performance through financing decisions. We find that managers are more likely to avoid ROE dilution related to debt-versus-equity choice when their performance-vested stock option plans are explicitly tied to ROE performance and when firms have a high level of access to bank loans. However, there is no such link for firms with a low level of access to bank loans. Our study shows that the association between executive compensation design and corporate financing decisions depends on the accessibility of bank loans, demonstrating the importance of institutional factors in China. The results hold after controlling for potential endogeneity in executive compensation and corporate financing decisions. Our study contributes to both the executive compensation and corporate finance literature.
