An Empirical Analysis of the Impact of Corporate Governance on Executives Compensation in State-owned Listed Enterprises in China

Li, Muzi (2020) An Empirical Analysis of the Impact of Corporate Governance on Executives Compensation in State-owned Listed Enterprises in China. [Dissertation (University of Nottingham only)]

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Among the various agency relationships within the company organization, the senior executives of the companies are the main decision makers. The

performance of the company, the development prospect of the company

and the realization of the interests of the shareholders of the company are

all related to the selection and decision-making of the senior executives to a

great extent. Therefore, the agency relationship between the shareholders

and the senior executives of the enterprises undoubtedly has a prominent

and important position. Through the reasonable corporate governance

structure to improve the efficiency of salary arrangements, of course, has

been the concern of around the world. If the corporate governance is

reasonable, it can ease the agency problem of shareholders and managers

caused by the separation of ownership and management rights. Besides, it

could also reduce the cost of agency by keeping the interests of managers

and shareholders more consistent. The purpose of this research is to verify the impact of corporate governance

on senior executives compensation in Chinese state-owned enterprises

through empirical analysis. Based on the review of relevant theory and

literature, this paper takes A-share state-owned listed companies in

Shenzhen and Shanghai stock exchanges as samples, collects relevant data

from CSMAR database, and uses descriptive statistics and multiple linear

regression methods. After that, this paper analyzes the impact of corporate

governance structure on executive compensation in state-owned

enterprises, and provides suggestions for improving the effectiveness of

corporate governance, as well as some reform measures of executive

compensation. The results of regression reveal that in the sample companies, executive

compensation is positively correlated with the size of the board of directors, the duality of CEO and the proportion of executives' shareholding. Besides, the relationship between executive compensation and ownership

concentration and the proportion of independent directors on the board is

not significant. Furthermore, this paper analyzes the above regression

results, combined with the status of the corporate governance structure and

executive pay in Chinese state-owned listed companies. Finally, the paper

offers the following suggestions on the improvement of corporate

governance structure and the standardization of executive compensation in

Chinese state-owned enterprises.


1.Establish the appropriate board size. 2.Eliminate the duality of CEO. 3.Combine executive compensation with long-term performance of the

company, and develop equity incentive supporting policies. 4.Improve the supervision and evaluation mechanism of non-executive

directors, build the accountability system of non-executive directors, and

link the remuneration of non-executive directors with firm performance. 5. Form multiple equity identities and clarify the subject of property rights.

Item Type: Dissertation (University of Nottingham only)
Depositing User: LI, MUZI
Date Deposited: 19 Apr 2023 09:52
Last Modified: 19 Apr 2023 09:52

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