The Impact Of Corporate Governance On Top Executives Compensation And Pay-performance Sensitivity In Chinese Listed Firms

As the real manager of a company's daily operation, the top executives'behavior and decisions have critical impact on the company's performance. To great extent, the top executives'choices will decide the company's prospects and the shareholder's benefit. Therefore, how to set the top managers'salary and how to encourage the top executives efficiently is an important research topic, which attracts many researchers all over the world. They study the area from all perspectives. The goal of this paper is to find out how the impact of corporate governance on top executives compensation and pay-performance sensitivity in Chinese state owned listed firms is.On the base of former literature, the paper takes a related data from the listed companies of Shanghai and Shenzhen stock market from 2004 to 2006 as our research sample, which are collected from CCER and Csmar database. We set the scale of the board, the ratio of independent directors,president and general executives dual situation, the stocks proportion of first major shareholder, whether the remuneration committee exists as independent varieties, the ROE, the scale of the company and the industry that the company belongs to as the controlling varieties, and then use descriptive statistics and the multi-dimensional linear regression method to study all the varieties'impact on the dependent variety——the salary of top executives.The research discovered that in the sample enterprise, the enterprise scale (total assets), whether to be equipped with the remuneration committee, the independent director proportion as well as the board of directors scale present positive relative to the salary of top executives. While the stocks proportion of first major shareholder has negative relative to the payment of top executives.In the research of pay-performance sensitive regression, we find that stocks higher proportion of first major shareholder can enhance the pay-performance sensitivity, but scale of board will weaken the sensitivity, moreover, whether to be equipped with the salary committee and independent director's proportion have no remarkable impact on the pay-performance sensitive.At last, we will analysis all the findings above and then attempt to give suggestions to the reform of state-owned companies in our country according to our conclusions.