An Empirical Analysis On The Correlation Between Board Governance Structure And Top Executive Compensation Of IT Industry

The21st century is the information age. The information technology industry,as a pillar of socio-economic development of today’s forces, gains more and moreattention. The senior management staff, who play a key role in the development ofinformation technology, are directly affected by its reasonable level of remuneration.Under the background of the global economic crisis triggered by the U.S. subprimecrisis, frequently burst-paid corporate executives caused unreasonable attention ofGovernments. Governments have gradually introduced new restrictions on high-paidcorporate executives unreasonable policy since2008. Allows people to pay attention,for the executives reached an unprecedented height.Based on the sample of the “A-shares” in Shanghai and Shenzhen StockExchange in China’s information technology industry in2008-2010, the paperanalyzes the correlation between board governance structure and top executivescompensation. As board governance structure, the paper analyzes from the followingboard governance features：the proportion of inside directors, the proportion ofindependent directors, the average age of the board, the incompatible of the boardChairman and the executives, the size of the board and the situation of RemunerationCommittee. First, the article presents descriptive statistical analysis，correlationanalysis, single variables comparative analysis. Second，this paper makes multipleregression analysis based on the above analysis.Empirical results show that the proportion of inside directors and board sizehave positive correlation with executives compensation, the proportion ofindependent directors have negative correlation with executives compensation, theaverage age of the board, the incompatible of the board Chairman and the executives,the situation of Remuneration Committee have no obvious correlation withexecutives compensation. The model can only explain less than40%data, the powerof the board need to be enhanced.At last，the article makes suggestions for a powerful board．...