Cronyism of Board Culture and Excessive Executive Compensations-Evidence from Chinese Listed Firms
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| Title | Cronyism of Board Culture and Excessive Executive Compensations-Evidence from Chinese Listed Firms
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| Author | Zheng Zhigang, Sun Juanjuan and Rui Oliver |
| Organization | School of Finance, Renmin University of China; Chinese University of Hongkong |
| Email | zhengzhigang@ruc.edu.cn； |
| Key Words | Excessive Executive Compensations; Culture Characteristics of the Board; Cronyism and Corporate Governance. |
| Abstract | This paper empirically explores the causes and economic consequences of excessive executive compensations from the perspective of cronyism of board culture based on China’s listed firms. After controlling for the potentially influential institutional characteristics of board on executive excessive compensation, we show that cronyism of board culture would lead to excessive executive compensations and to disperse compensations to the directors (chairman) through the investors (such as controlling shareholders), instead of the listed firms will refrain excessive executive compensations. This paper therefore provides evidence that besides the institutional characteristics, culture characteristics of the board will also affect the effectiveness of the board independence by using excessive executive compensations as an example. |
| Serial Number | WP215 |
| Time | 2012-02-15 |
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