Corporate Governance and Executive Compensation in China

Abstract In order to improve the effectiveness of compensation performance contract and alleviate the agency problem, many scholars at home and abroad pay more attention to the topic of corporate governance structure. In addition, due to different economic environment and economic conditions, foreign research results are not applicable to domestic companies because there are some differences in corporate governance structure between China and foreign countries. Therefore, this paper analyzes the influence of governance structure on executive compensation by using the data of listed companies in China. Based on the data of 1397 listed companies in Shanghai and Shenzhen stock exchanges from 2014 to 2018, this paper empirically analyzes the impact of corporate governance structure on executive compensation. This dissertation mainly studies corporate governance structure from two aspects: ownership structure and board governance structure. The ownership structure is expressed by the concentration of ownership. The governance structure includes five variables: the board size, CEO duality, supervisory board size, compensation committee and independent director ratio. The regression results show that CEO duality, board size and supervisory board size are significantly correlated with executive compensation. However, there is no significant correlation between the establishment of compensation committee, independent director ratio and ownership concentration and executive compensation. Finally, the limitations of the above research are explained. And put forward some relevant Suggestions according to the research results. These Suggestions mainly aim to improve the system of independent directors and remuneration committees