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《Securities Market Herald》 2012-01
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Can Institutional Investors Improve the Incentive Compensation for Corporate Executives of Listed Companies?

Li Chao,Cai Qingfeng,Chen Jiao  
Since the outbreak of the credit crisis,the sky-high salary enjoyed by corporate executives has become the public enemy.As the institutional investors in China are thriving in recent years,the market has placed great expectation on their role in the improvement of corporate governance.Thus this paper devotes itself to discussing whether institutional investors in China could bring positive influence to compensation mechanism and equity incentive of corporate executives.Using data of listed companies from 2004 to 2008,this paper applies linear probability model,Probit,Logit,Tobit and OLS to conduct empirical tests on the relationship between institutional share-holding and compensation incentive,especially equity incentive.The empirical results suggest that institutional investors in China failed to restrain either the growth of equity incentive or fixed salary of corporate executive and their improvement impact on compensation design is also far from perfect.That means there is a long way for institutional shareholders activism to strive on.
【Fund】: 教育部“国际金融危机应对研究”应急课题“金融中介的利益冲突及其监管(2009JYJR042)”;; 国家社科基金项目“基金经理和公司经理的合谋及其对市场效率的影响(08CJY061)”的资助
【CateGory Index】: F272.92;F224
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