Ownership, Corporate governance and CEO compensation in ChinaTools PAN, YIMING (2020) Ownership, Corporate governance and CEO compensation in China. [Dissertation (University of Nottingham only)]
AbstractAfter the economic reform in China, some of state-owned enterprises have been privatized and become listed firms. There are some changes in ownership and control, which also influences the CEO compensation. This dissertation examines factors that influence CEO pay in China based on the understanding of economic reform in China. Among them, ownership and corporate governance characteristics are two important factors. This dissertation also studies the pay-performance relationship and the impacts of ownership and some corporate governance characteristics on CEO compensation because performance is the basic criteria for pay according to agency theory. The time period covered by this study is from 2014 to 2018. This study takes the background of economic reform into consideration, which fills the gap in previous studies. Quantitative method is used to find the relationship between variables from a sample of companies listed in Shanghai and Shenzhen stock exchange. This study finds that CEO pay is positively correlated with firm performance. State-owned companies have higher CEO pay and closer pay-performance relation. The larger and more independent board has higher CEO pay and closer pay-performance relation. The different ownership and some corporate governance characteristics certainly have impacts on CEO pay and pay-performance relation. This dissertation helps listed firms in China to establish CEO pay scheme which can best motivate CEOs and improve firm performance. They can consider the factors mentioned in this study when setting up the pay scheme. It also has public policy implications for China and other transitional economies that are moving away from state ownership of business enterprises.
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