DETERMINANTS OF EXECUTIVE COMPENSATION IN CHINESE FIRMS

Abstract

Corporate governance and CEO compensation have been extensively researched. This research investigates both themes concurrently and attempts to derive a synthesis from this unified perspective that might provide insight into future governance improvements. This paper examines the impact of corporate governance, CEO compensation, management, planning and performance on executive compensation among Chinese Firms. Surprisingly, the result implies that performance is the only independent variable found to be insignificant to executive compensation. This is because the governance and management factors have a stronger impact on the compensation of executives who are not the C-suite management. The results may help boards of directors choose how to pay executives in a manner that coincides with their firms' financial performance. More factors should be considered in determining the compensation of executives.