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The Impact of Corporate Governance Performance on Executive Compensation: An Empirical Study of Listed Companies

In: Proceedings of the 2026 11th International Conference on Financial Innovation and Economic Development (ICFIED 2026)

Author

Listed:
  • Yiying Wang

    (Xi’an Jiaotong Liverpool University)

Abstract

Executive compensation has long been at the center of corporate governance debates, particularly in emerging markets such as China. Over the past decade, managerial pay in Chinese listed firms has risen sharply, raising concerns about governance efficiency and incentive alignment. This paper investigates the impact of governance performance—measured by Environmental, Social, and Governance (ESG) governance scores—on executive compensation among A-share listed companies between 2012 and 2022. Using firm-level panel data and fixed-effects estimation, the study examines whether stronger governance mitigates excessive executive pay and enhances the link between pay and performance. Results indicate that higher governance scores are significantly associated with lower compensation levels and stronger pay–performance sensitivity, particularly among privately owned enterprises. These findings highlight the importance of effective governance systems in ensuring equitable and performance-based pay structures in China.

Suggested Citation

  • Yiying Wang, 2026. "The Impact of Corporate Governance Performance on Executive Compensation: An Empirical Study of Listed Companies," Advances in Economics, Business and Management Research, in: Xiongfeng Pan & Huaping Sun & Abdul Rauf & Md Rabiul Islam & Liew Chee Yoong (ed.), Proceedings of the 2026 11th International Conference on Financial Innovation and Economic Development (ICFIED 2026), pages 242-248, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6239-642-5_25
    DOI: 10.2991/978-94-6239-642-5_25
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