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Managerial compensation structure and firm performance in Chinese PLCs

Managerial compensation structure and firm performance in Chinese PLCs

Su, Larry (2012) Managerial compensation structure and firm performance in Chinese PLCs. Asian Business & Management, 11 (2). pp. 171-193. ISSN 1472-4782 (Print), 1476-9328 (Online) (doi:https://doi.org/10.1057/abm.2011.31)

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Abstract

In this paper, I examines whether and to what extent intra-firm compensation structure affects managerial incentives and firm performance. Using an unbalanced panel which consists of a total of 43626 executives in 1362 publicly listed corporations (PLCs) in China during 1999 and 2007, I find that pay increases as executives move up the corporate hierarchy into higher versus lower ranks. In addition, pay gap is the largest between the first and second tier executives. Pay dispersion is positively related to the number of tournament participants, the level of risk in the business environment and firm performance. Moreover, state ownership and corporate governance play some role in determining managerial pay dispersion and firm performance. The empirical results are consistent with the tournament theory and against equity, relative deprivation and sabotage theories of managerial compensation.

Item Type: Article
Uncontrolled Keywords: managerial compensation, tournament theory, human resource management, publicly listed corporations, China
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
H Social Sciences > HF Commerce
Faculty / Department / Research Group: Faculty of Business > Department of International Business & Economics
Related URLs:
Last Modified: 14 Oct 2016 09:19
Selected for GREAT 2016: None
Selected for GREAT 2017: None
Selected for GREAT 2018: None
URI: http://gala.gre.ac.uk/id/eprint/7827

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