Research on the Relationship between TMT Incentive and Shareholder´s Wealth: Evidence from Listed Companies in Telecommunications Industry of China

With listed companies of telecommunications industry of China in 2001, this paper verifies that chairman of board or general manager (CBORGM)´s share-holding contributes to the increasing of Market Value Added (MVA) by analysis-of-variance models. On this base, this paper further discusses relationships between TMT incentive and shareholder´s wealth. The results show: (1) whether CBORGM holds share or not affects TMT´s compensation and share-holding; (2) for the whole sample, TMT´s compensation is significantly positively related with Economic Value Added (EVA) and MVA, proportion of personnel who holds share is significantly positively related with MVA; TMT compensation gap is significantly negatively related with MVA; (3) for sub-samples of CBORGM holding no share, TMT´s compensation is significantly positively related with MVA, proportion of personnel who holds share is significantly positively related with MVA; (4) for sub-samples of CBORGM holding share, TMT´s compensation is significantly positively related with EVA and MVA