Empirical Research on Effect of Managerial Discretion on CEO Pay: Monitoring Intensity as Moderator Variable

Abstract:

The paper focuses on the special manipulation effect of managerial discretion on CEO pay considering the moderating role of monitoring intensity in China. The paper empirically indicates that the manipulation effect of managerial discretion on CEO pay does exist, and quantitatively describes the degree of the manipulation effect, which shows that the manipulation effect of managerial discretion on CEO pay significantly decreases. The results prove that monitoring intensity can restrain the manipulation effect of managerial discretion on CEO pay. Only under a certain monitoring intensity, will CEO pay not exceed the reasonable level too heavily.

• Periodical: Advanced Materials Research (Volumes 452-453)
• Pages: 412-416
• DOI: https://doi.org/10.4028/www.scientific.net/AMR.452-453.412
• Online since: January 2012
• Authors: Chang Zheng Zhang, Kai Gan
• Keywords: CEO Pay, Empirical Research, Listed Firms, Managerial Discretion, Monitoring Intensity

References

[1] Zan Xinmin, Liu Shanmin. Empirical study on the difference of managerial compensation structure In Chinese listed firms[J]. The Journal of Economics Research, 2003, (8), pp.55-63. (In Chinese)

[2] Yin Changsen. Study on the relationship between managerial incentive compensation and firm performance of Chinese listed firms[J]. Management Science, 2004,(1), pp.125-132. (In Chinese)

[3] Hao Ying, Liu Xing, Lin Chaonan. An Empirical Research on the General Manager Overconf idence and Investment Decision for the Listed Companies[J]. Journal of Management Sciences in China, 2005,(5), pp.142-148. (In Chinese)

[4] Wang P., Tian Y., Li Y. Empirical study on the issue of executives compensation In Chinese listed firms[J]. Management Science, 2006, (3): 59-65. (In Chinese)

[5] Barkema Harry and Johannes Pennings. Top Management Pay: Impact of Overt andCovert Power [J]. Organization Studies , 1998, (19), pp.975-1003.

DOI: 10.1177/017084069801900604

[6] Garry L. Adams. Power Plays: A Longitudinal Examination of CEO/BOD Power Circulation and its Impact on Organizational Performance [D]. The Florida State University college of Business, Doctoral Dissertation , 2004.

[7] Donghui Li, Fariborz Moshirian, Pascal Nguyenand Liwen Tan. Corporate governance or globalization: What determines CEO compensation in China?[J]. Research in International Business and Finance. 2007,01, pp.32-49.

DOI: 10.1016/j.ribaf.2005.12.003

[8] Phillip Leslie, Paul Oyer. Managerial incentives and value creation: evidence from private equity[Z]. Stanford University Working paper, October, 2008, 1-41.

DOI: 10.3386/w14331

[9] Jensen, M.C., Murphy, K.J. Performance Pay and Top-Management Incentives[J]. Journal of Political Economy, 1990, 98(2), pp.225-264.

DOI: 10.1086/261677

[10] Zhang Changzheng, Li HuaiZu. Manipulation effect of managerial discretion on CEO pay: Evidence from Listed Firms of China[C]. 6th International Conference on Management, Wuhan, China, 2007, pp.1093-1102.