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Disproportional Ownership Structure And Pay-Performance Relationship: Evidence From China's Listed Firms, Jerry Cao, Xiaofei Pan, Gary G. Tian
Disproportional Ownership Structure And Pay-Performance Relationship: Evidence From China's Listed Firms, Jerry Cao, Xiaofei Pan, Gary G. Tian
Xiaofei Pan
This paper examines the impact of disproportional ownership structure on the pay-performance relationship in China’s listed firms. We find that the cash flow rights of the ultimate controlling shareholder have a positive effect on this relationship while a divergence between the control rights and cash flow rights has a significantly negative effect. By dividing our sample into state owned enterprises (SOE), state assets management bureaus (SAMB), and privately controlled firms, we find that cash flow rights in SOE controlled firms have a significant impact on accounting based pay performance and cash flow rights in privately controlled firms also affect the …