Mixed ownership reform of state-owned enterprises and executive compensation stickiness: Evidence from China

Rongwu Zhang, Yanzhen Lin, Wenjia Zhang and Jianjun Du

International Review of Economics & Finance, 2024, vol. 95, issue C

Abstract: Optimization of executive compensation incentives is an important part of the reform of state-owned enterprises, but the existence of executive compensation stickiness weakens the effect of compensation incentives. Based on data of state-owned enterprises listed on the Chinese A-shares market over the 2013–2019 period, this paper evaluates the ownership reform, or mixed ownership, of state-owned enterprises by the shareholder ratio of non-state shareholders and the appointed directors, and examines the relationship between the mixed ownership reform of state-owned enterprises and the executive compensation stickiness. The study concludes with the following findings. The shareholder ratio of non-state shareholders has no significant impact on the executive compensation stickiness, whereas directors appointed by non-state shareholders significantly reduce the executive compensation stickiness. Compared to pure central enterprises, the inhibiting effect of the mixed ownership reform on the executive compensation stickiness is more significant in local state-owned enterprises. The inhibiting effect of the mixed ownership reform on the executive compensation stickiness is more significant when managerial power is restricted or regional marketization degree is low. This paper enriches and extends extant studies on the impact of ownership reform on executive compensation incentives from the perspective of executive compensation stickiness, and provides important empirical evidence for the enhanced relationship between reforms of state-owned enterprises and executive compensation.

Keywords: Mixed ownership reform of state-owned enterprises; Executive compensation stickiness; Non-state shareholders; Corporate governance (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1059056024004246
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:95:y:2024:i:c:s1059056024004246

DOI: 10.1016/j.iref.2024.103432

Access Statistics for this article

International Review of Economics & Finance is currently edited by H. Beladi and C. Chen

More articles in International Review of Economics & Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().