Foreign shareholders and executive compensation stickiness: Evidence from China

Qicheng Zhao, Changyu Hu, Ruiyun Ma, Yugang Yin and Yahui Liu

Finance Research Letters, 2024, vol. 59, issue C

Abstract: This research examines the impact of foreign shareholders on executive compensation stickiness by analyzing China's listed companies from 2007 to 2022. The analysis finds that foreign shareholder ownership leads to an increase in executive pay stickiness by increasing upward pay sensitivity. The individualistic cultural imprint and supervision costs play a crucial role in this mechanism. Additionally, the positive impact of foreign ownership on executive compensation stickiness is more significant in the sample where foreign shareholders are the actual controllers and the internal and external monitoring is weak. Furthermore, the hypothesis regarding the positive effect of executive compensation stickiness is validated by identifying the increasing of firm innovation and value.

Keywords: Foreign ownership; Executive compensation stickiness; Individualistic cultural imprint; Supervision costs (search for similar items in EconPapers)
JEL-codes: F21 J31 M14 Q55 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:59:y:2024:i:c:s1544612323011625

DOI: 10.1016/j.frl.2023.104790

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