A Study On Top Executives With Military Experience And Their Private Benefits

Military executives are a special group enjoying much attention and reputation both in domestic and overseas.They have unique values and special characteristics which are learned and developed in their early military experience so that their values and characteristics have a continuous distinction.Based on the most well-known features of China’s veterans are duty,dedication,and self-sacrifice,this paper assumes military executives have a strong felling of dedication and discipline.On this bases,top executives military experience have been researched with corruption,stock option backdating and tax avoidance etc,but so far there is hardly any research combines it with their private benefits.Top executives’ private benefit is a combination of abnormal payment and unreasonable perquisite consumption,which is a kind of agency cost.Executives’ power,the governance involvement of disciplinary commission,managerial ownership and external environment factors can play a constrained role on top executives’ private benefits,so,study on top executives with military experience and their private benefits can not only fill the blank area between executives’ personal characteristics and private benefits,but can also test whether top executives’ military experience has an continuous impact on their benefits.In this paper,we divide executive’s private benefits into monetary private benefits and non-monetary private benefits,use data from Chinese A shares listed company from 2005-2014 and form the sample in a critical standard using Propensity Score-matching method that can exclude the possible interference confounding variables may produce.Based on Upper Echelons Theory and Agency Theory,through multiple linear regression,three main conclusions are found as follow:1)Top military executives will have relatively but significantly lower private benefits than their local peers which means military executives would keep their style(hard working,plain living and strict discipline observing)which has been acquired during their military service.2)Our presumptions vary in different corporate governance environment and national systems.In China,absence of owner,salary restriction and abuse of executive power exist in state-owned companies as major governance problems,hence,the negative relationship between top executives’military service and private benefits will be weaker.3)Through intensive studies we find that top military executives’ business education background and firm founder status have no significant impact on their private benefits which confirm the exact relationship between top executives’ military service and private benefits.As followed are the contributions of this paper.This paper might expand the scope of the researches on executives’ private benefits and enrich studies about top executives’ early military experience.As the first exploration of top executives’military service and their private benefits,it not only broaden the way for numerous veterans but also provide more explanations and suggestions for the military cultural construction;besides,it brings suggestions for companies when hiring and choosing top executives which can protect shareholders’ rights and the whole companies’rights.