Will the New Executive Get Higher Compensation?: From the Empirical Evidence of Peer Reference Effect

doi:10.16382/j.cnki.1000-5579.2017.02.017

Abstract

Abstract:

Based on the institutional environment of China, this paper uses the 2008—2014 data of China's A-share listed companies to explore how to adjust its executive compensation contract and whether the company will promote the growth of executive compensation. We find out that there is a peer reference effect in the contracts of executive compensation, the new executives positively associates with executive compensation growth, and the company which has a new executive event will tend to use the peer reference effect to improve the level of executive compensation. Moreover, this tendency is stronger when the new executives come from outside and the former executives are abnormal turnover. The research of this paper is of great theoretical and practical significance to providing reference for the reform of the state-owned enterprise executives, and to deepening the reform of state-owned enterprises.

Key words: new executive, executive compensation, peer reference effect, listed companies, state-owned enterprises

YANG Rong, LUO Kun. Will the New Executive Get Higher Compensation?: From the Empirical Evidence of Peer Reference Effect[J]. Journal of East China Normal University (Philosoph, 2017, 49(2): 163-172.

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