Title of article :
How Do Independent Directors View CEO Pay Disparity in China?
Author/Authors :
Abubakkar Siddique, Muhammad Department of Accounting and Finance - School of Management - Xi’an Jiaotong University - Xi’an, China , Jafar, Shagufta Department of Accounting and Finance - School of Management - Xi’an Jiaotong University - Xi’an, China , Usman, Muhammad Faculty of Finance and Banking - Ton Duc Thang University - Ho Chi Minh City, Vietnam
Abstract :
Given the vital role of independent directors in determination of executives’
compensation, we explore how independent directors view the CEO pay disparity. Using
the data of all companies listed on the Shenzhen and Shanghai stock exchanges for the
period 2005 to 2015, we find that the proportion of independent directors on the board is
negatively associated with the extent to which executives’ pay is dispersed. This finding
suggests that independent directors view the dispersion of the CEO’s and other executive
directors’ pay from the managerial power theory perspective rather than from the
tournament theory.
Keywords :
CEO pay disparity , CEO tenure , China , independent directors , managerial power , and state owned firms , tournament incentives
Journal title :
Pakistan Journal of Commerce and Social Science
