| Summary: | 碩士 === 輔仁大學 === 企業管理學系管理學碩士班 === 103 === In this study I explore the pay-performance relation using the sample of the listed firms in China in the sampling period of 2003-2013. One special corporate-governance attribute associated with China stock market is that most listed firms experienced share-reform program in which non-tradable shareholders compensate tradable shareholders for obtaining liquidity.
Other than the dependent variable of manager’s pay and the independent variable of performance (ROA, Tobin’s Q, and stock returns), the exploration of pay-performance sensitivity also includes the control variables such as the incentive-pay dummy, the dummy signifying that the controlling shareholder is government, and variables of ownership structure and board structure.
The empirical results show that manager’s salary is positively associated with accounting performance (ROA) and market performance (Tobin’s Q). I also conduct split-sample test and find that the pay-performance relation is more salient for the latter than earlier period, implying the relation is more solid as the passage of time. However, I fail to find a significant contrast in the pay-performance before and after the share reform. Furthermore, I find that the fixed salary is low while the pay-performance relation is more salient for firms whose controlling shareholder is government. Finally, the pay-performance relation is more sensitive for firms with stable performance indicators.
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