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Research on Influencing Factors of Executive Compensation in China’s Monopoly Industries

DOI: 10.4236/ojbm.2014.23026, PP. 210-218

Keywords: Monopoly, Executive Compensation, Factors, Firm Performance, CEO Duality

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Abstract:

The annual salary income of the executives in the state-owned monopoly industry has become the focus of the society recently. With the improvement of enterprise efficiency, executives deserve to get high pay. However, it’s should be noted that because of the state-owned monopolies’ special status, business performance relies heavily on administrative monopoly power, but not actually the efforts of leaders. In this case, the income distribution mechanism is distortion, which has caused great dissatisfaction. This paper aims to study the main affecting factors of the executive compensation of state monopolies, with 1280 firm-year observations of 183 monopoly companies. We find that 1) Executive compensation is positively correlated to firm performance, firm size, CEO duality; 2) Executive compensation is negatively correlated to state share proportion and independent director proportion; 3) Company location, industry both have significant influence on executive compensation.

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