An Empirical Study On The Relationship Between Board Characteristics And Executives’ Remuneration In Listed Companies

The global economic was affected to a great extent by financial crisis last year, and the reports and comments about executives’remuneration were widely. The executives’remuneration draws more attention of the society once again. In the last few years, corporate governance and executives’remuneration have become one of the academic research hot spots. In many kinds of agency problem of the company, managers are mainly decision-maker. Achieving of the corporate operation performance and the shareholder benefit is correlated with the management of the managers to a large degree. Therefore, agency relationship between shareholder and managers is one of the major relations. As the main means of inspiriting and supervising the managers and solving the problem of principal agent relationship, designing reasonable remuneration system and improving the efficiency of the remuneration system are the most important in corporate governance structure, and they reflect the validity of the corporate governance to a great extent.Board of director is regarded as core of corporate governance, moreover also has the direct function mechanism to executives’remuneration. Accompany with introduction and establishment of Independent Director system and establishment of the remuneration and appraisal committee, the relationship between the board of directors and executives’remuneration should have more attention shown. But at present the research achievement has certain dispute on the effect of the board characteristics and executives’remuneration. This article is for the purpose of discussing effect on Board characteristic to the executives’remuneration, and based on this attempts to analyze of the board characteristic existence to the sensibility of executives’remuneration-performance. The study has an important meaning on improving corporate governance in present Listed China companies.This paper uses the method combining canonical parse and empirical analysis, and emphasize particularly on using the method of empirical analysis to study the effect of board characteristic and executives’remuneration. Based on reviewing the theories and concepts of board characteristic and executive remuneration, firstly empirical studies will show that the effect of Board characteristics and executives’remuneration. Because of management compensation contracts are normally designed with the companyperformance standards, therefore, this paper further analyses the impact of the different of Board characteristics and the sensibility of remuneration-performanceThis result of the empirical study shows:(1) The scale of board has a positive effect on executives’remuneration; in further analysis of board characteristics on the impact of the sensitivity of remuneration-performance, it confirms that a smaller board size can enhance the sensitivity of remuneration-performance in a certain extent (2) The independence of the board has a positive influence to the executives’remuneration. In further analysis of the independence of the board on the impact of the sensitivity of remuneration-performance, it proves that more independent board, executive pay and company performance strength of the relevance of the more stronger.(3) The establishment of Remuneration and Committee does not have the significance influence to the executives’ remuneration, In further analysis of remuneration and appraisal committee on the impact of the sensitivity of remuneration-performance, it confirms that the Remuneration Committee can significantly increase the sensitivity of remuneration-performance.