Managerial power theory, tournament theory, and executive pay in China

Journal of Corporate Finance

Volumn 17, Issue 4, 2011, Pages 1176-1199

  Chen, Jing ^a   Ezzamel, Mahmoud ^b,c   Cai, Ziming ^a  

^a UNIVERSITY OF THE WEST OF ENGLAND   (United Kingdom)

^b CARDIFF UNIVERSITY   (United Kingdom)

^c IE BUSINESS SCHOOL   (Spain)

Author keywords

Executive pay; Managerial power theory; Organization levels; Tournament theory

Indexed keywords

EID: 79960953422     PISSN: 09291199     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.jcorpfin.2011.04.008     Document Type: Article

References (61)

1. Barkema H., Gomez-Mejia L.R. Managerial compensation and firm performance: a general research framework. Acad. Manage. J. 1998, 41:131-146.
2. Bloom M. The performance effects of pay dispersion on individuals and organizations. Acad. Manage. J. 1999, 42:25-40.
3. Boyd B.K. Board control and CEO compensation. Strateg. Manage. J. 1994, 15:335-344.
4. Boyd B.K. CEO duality and firm performance: a contingency model. Strateg. Manage. J. 1995, 16:301-312.
5. Chen, H. 2006. Board characteristics, ownership structure and executive remuneration in China. PhD thesis. Cardiff Business School. Cardiff University.
6. Cheung Y.L., Stouraitis A., Wong A.W.S. Ownership concentration and executive compensation in closely held firms: evidence from Hong Kong. J. Empiri. Finance 2005, 12:511-532.
7. Chung K.H., Pruitt S.W. Executive ownership, corporate value, and executive compensation: a unifying framework. J. Bank. Finance 1996, 20:1135-1159.
8. Conyon M.J., Peck S.I., Sadler G.V. Corporate tournaments and executive compensation: evidence from the U.K. Strateg. Manage. J. 2001, 22:805-815.
9. Core J.E., Holthausen R.W., Larcker D.F. Corporate governance, chief executive officer compensation, and firm performance. J. Financ. Econ. 1999, 51:371-406.
10. Daily C.M., Dalton D.R. Bankruptcy and corporate governance: the impact of board composition and structure. Acad. Manage. J. 1994, 37:1603-1617.
11. Denis D.J., Sarin A. Ownership and board structures in publicly traded corporations. J. Financ. Econ. 1999, 52:187-223.
12. Eriksson T. Executive compensation and tournament theory: empirical tests on Danish data. J. Labor Econ. 1999, 17:262-280.
13. Ezzamel M.A., Watson R. Pay comparability across and within UK boards: an impirical analysis of the cash pay awards to CEOs and other board members. J. Manage. Stud. 2002, 39:207-232.
14. Fan J.P.H., Wong T.J., Zhang T. Politically connected CEOs, corporate governance, and Post-IPO performance of China's newly partially privatized firms. J. Financ. Econ. 2007, 84:330-357.
15. Finkelstein S. Power in top management teams: dimensions, measurement, and validation. Acad. Manage. J. 1992, 35:505-538.
16. Finkelstein S., D'aveni R.A. CEO duality as a double-edged sword: how boards of directors balance entrenchment avoidance and unity of command. Acad. Manage. J. 1994, 37:1079-1108.
17. Firth M., Fung P.M.Y., Rui O.M. Corporate performance and CEO compensation in China. J. Corp. Finance 2006, 12:693-714.
18. Fisher F.M., Mcgowan J.J. On the misuse of accounting rates of return to infer monopoly profits. Am. Econ. Rev. 1983, 73:82-97.
19. Fung P., Firth M., Rui O.M. Corporate Governance and CEO Compensation in China, Working Paper 2003, Chinese University of Hong Kong.
20. Executive Compensation: A Reassessment and a Future Research Agenda 1994, JAI Press, Greenwich, CT. L. Gomez Mejia (Ed.).
21. Grabke-Rundell A., Gomez-Mejia L.R. Power as a determinant of executive compensation. Hum. Resour. Manage. Rev. 2002, 12:3-23.
22. Part II Corporate Governance 2003, China Development Press, Beijing. R. Guo, W. Jiang (Eds.).
23. Hill C.W., Phan P. CEO tenure as a determinant of CEO pay. Acad. Manage. J. 1991, 34:712-717.
24. Himmelberg C.P., Hubbard R.G., Palia D. Understanding the determinants of managerial ownership and the link between ownership and performance. J. Financ. Econ. 1999, 53:353-384.
25. Hofstede G. Culture's Consequences: Comparing Values, Behaviors, Institutions, and Organizations Across Nations 2001, Sage, London.
26. Kato T., Long C. Tournaments and Managerial Incentives in China's Listed Firms: New Evidence. China Econ. Rev. 2010, 22(1):1-10.
27. Kole S.R. Measuring managerial equity ownership: a comparison of sources of ownership data. J. Corp. Finance 1995, 1:413-435.
28. Laing D., Weir D. Corporate performance and the influence of human capital characteristics on executive compensation in the UK. Pers. Rev. 1999, 28:28-40.
29. Lambert R.A., Larker D.F., Weigelt K. The structure of organizational incentives. Adm. Sci. Q. 1993, 38:438-461.
30. Lang L.H.P., Stulz R.M. Tobin's q, corporate diversification, and firm performance. J. Pol. Econ. 1994, 102:1248-1280.
31. Larcker D.F., Rusticus T.O. On the Use of Instrumental Variables in Accounting Research (16 May 2008) 2008, available at SSRN: http://ssrn.com/abstract=694824.
32. Lazear E.P. Personnel Economics 1995, MIT Press, Cambridge, MA.
33. Lazear E.P., Rosen S. Rank-order tournaments as optimum labor contracts. J. Pol. Econ. 1981, 89:841-864.
34. Leone A.J., Wu J.S., Zimmerman J.L. Asymmetric sensitivity of CEO cash compensation to stock returns. J. Account. Econ. 2006, 42:167-193.
35. Li D., Moshirian F., Nguyen P., Tan L. Corporate governance or globalization: what determines CEO compensation in China?. Res. Int. Bus. Finance 2007, 21:32-49.
36. Lin B.-X., Lu R. Managerial power, compensation gap and firm performance - evidence from Chinese public listed companies. Global Finance J. 2009, 20:153-164.
37. Lin X., Che H., Zhu M. Research on the managerial ownership in Chinese listed companies. Nankai Bus. Rev. 2002, 4:23-27. (in Chinese).
38. Lin Chen, Shen Wei, Dongwei.Su Corporate Tournament and Executive Compensation in a Transition Economy: Evidence from Publicly Listed Firms in China 2009, April 22,, Available at SSRN: http://ssrn.com/abstract=1393507.
39. Main B.G.M., O'reilly Iii C.A., Wade J. Top executive pay: tournament or teamwork?. J. Labor Econ. 1993, 11:606-628.
40. McConnell J.J., Servaes H. Additional evidence on equity ownership and corporate value. J. Financ. Econ. 1990, 27:595-612.
41. McConnell J.J., Servaes H. Equity ownership and the two faces of debt. J. Financ. Econ. 1995, 39:131-157.
42. Mehran H. Executive compensation structure, ownership, and firm performance. J. Financ. Econ. 1995, 38:163-184.
43. Morck R., Shleifer A., Vishny R.W. Managerial ownership and market valuation - an empirical analysis. J. Financ. Econ. 1988, 20:293-315.
44. O'Reilly C.A., Main B.G.M., Crystal G.S. CEO compensation as tournament and social comparison: a tale of two theories. Adm. Sci. Q. 1988, 33:257-274.
45. Ozkan, N. July 292007. CEO compensation and firm performance: an empirical investigation of UK Panel Data. Available at SSRN: http://ssrn.com/abstract=1102703.
46. Petersen M.A. Estimating standard errors in finance panel data sets: comparing approaches. Review Financial Stud. 2009, 22:435-480.
47. Rosen S. Prizes and incentives in elimination tournaments. Am. Econ. Rev. 1986, 76:701-715.
48. Rui Oliver M., Firth Michael, Fung Peter M.Y. Corporate Governance and CEO Compensation in China January 2003, Available at SSRN http://ssrn.com/abstract=337841.
49. Ryan H.E., Wiggins R.A. The influence of firm- and manager-specific characteristics on the structure of executive compensation. J. Corp. Finance 2001, 7:101-123.
50. Short H., Keasey K. Managerial ownership and the performance of firms: evidence from the UK. J. Corp. Finance 1999, 79:79-101.
51. Sloan R. Accounting earnings and top executive compensation. J. Account. Econ. 1993, 16:55-100.
52. Sun Q., Tong W.H.S., Tong J. How does government ownership affect firm performance? Evidence from China's privatization experience. J. Bus. Finance Accounti. 2002, 29:306-686.
53. Tenev S., Zhang C., Brefort L. Corporate Governance and Enterprise Reform in China: Building the Institutions of Modern Markets 2002, The World Bank and The International Finance Corporation Washington D. C.
54. Tian J.J., Lau C.-M. Board composition, leadership structure and performance in Chinese shareholding companies. Asia Pac. J. Manage. 2001, 18:245-263.
55. Tosi H.L., Gomez-Mejia L.R., Loughry M.L., Werner S., Banning K., Katz J., Harris R., Silva P. Managerial discretion, compensation strategy and firm performance. Research in Personnel and Human Resource Management 1999, JAI Press, Greenwich, CT. G. FERRIS (Ed.).
56. Tosi H.L., Werner S., Katz J.P., Gomez-Mejia L.R. How much does performance matter: a meta-analysis of CEO pay studies. J. Manage. 2000, 26:301-339.
57. Wei G. Top management compensation and performance in listed companies (in Chinese). Econ. Res. J. Mar. 2000, 32-39.
58. Windmeijer F. A Finite Sample Correction for the Variance of Linear Efficient Two-Step GMM Estimators. Journal of Econometrics 2005, 162:25-51.
59. Yermack D. Higher market valuation of companies with a small board of directors. J. Financ. Econ. 1996, 40:185-211.
60. Zhang Z.-T. The Determinants of Managerial Compensation: Theoretical and Empirical Research (in Chinese) 2003, Economic Management Publishing House.
61. Zhou X. CEO pay, firm size, and corporate performance: evidence from Canada. Can. J. Econ. 2000, 33:213-251.