Moderating Effects of Large Shareholder Control and Board Monitoring on Top-management Compensation: Evidence from Private Listed Companies

摘要

This paper investigates moderating effects of large shareholder control and board monitoring on topmanagement compensation empirically. A model was developed from related findings, and the expectations in the model were explored with data gathered from 235 private companies listed on the Shanghai or Shenzhen Stock Exchange. The results generally support the model. They show that the managerial compensation depends on not only the corporate performance, but also corporate governance structure. In other words, compensation is an increasing function of performance, and board supervision tends to strengthen the relation while large shareholder control has an opposite effect. In order to improve the level of corporate governance in China private listed companies, the "redeemability" and "career paths incentive" actions discovered in the model impel the government to intensify its scrutiny of controlling shareholders' behavior and promote the board independence.