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CEO power, ownership structure and pay performance in Chinese banking

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  • Luo, Yongli

Abstract

This paper examines the determinants of executive compensation in Chinese banking during 2005–2012. Using the fixed effects panel, 2SLS and dynamic GMM regressions, I find that there is no significant positive pay performance relation, and CEO power does not necessarily exhibit higher levels of executive compensation. However, I show that ownership structure (measured by ownership concentration and ownership identification) and compensation committee are significant in determining executive compensation in Chinese banking. It suggests that government may ensure efficient monitoring functions when the pay incentive is ineffective. The results have important implication on bank regulation and corporate governance in emerging markets.

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  • Luo, Yongli, 2015. "CEO power, ownership structure and pay performance in Chinese banking," Journal of Economics and Business, Elsevier, vol. 82(C), pages 3-16.
    • Handle: RePEc:eee:jebusi:v:82:y:2015:i:c:p:3-16
    DOI: 10.1016/j.jeconbus.2015.04.003
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    6. Li, Tongxia & Munir, Qaiser & Abd Karim, Mohd Rahimie, 2017. "Nonlinear relationship between CEO power and capital structure: Evidence from China's listed SMEs," International Review of Economics & Finance, Elsevier, vol. 47(C), pages 1-21.
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    More about this item

    Keywords

    Ownership structure; Executive compensation; Corporate governance; CEO power; Chinese banking; G3; G15; G32; G38; J33;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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