Human Capital and CEO Compensation during Institutional Transitions
MetadataShow full item record
Firms appoint CEOs with different types of human capital in order to manage resource dependencies. How CEOs are compensated thus can be conceptualized as a valuation process of how boards view the value of CEOs' human capital. Two types of human capital - international experience and political ties - have emerged as potential drivers of CEO compensation during institutional transitions. But how they impact CEO compensation has remained unclear. We develop a resource dependence-based, contingency framework to focus on the external and internal factors that enable or constrain human capital to impact CEO compensation. Because of the tremendous regional diversity within China, externally, we focus on the level of marketization of the region in which firms are headquartered. Internally, we pay attention to two corporate governance mechanisms: politically connected outside directors and compensation committee. Data from 10,329 firm-year observations at 94 per cent of listed firms in China largely support our framework. Overall, our study contributes to resource dependence research by extending this research to the context of institutional transitions with a focus on how human capital impacts CEO compensation.
Showing items related by title, author, creator and subject.
State Ownership, Legal Institution, and Independent Director Compensation: An Exploratory Study in ChinaAdithipyangkul, Pattarin; Leung, T. (2015)This study examines the determinants of independent director compensation in China, with particular interest in the impact of state ownership and legal institutions. Controlling for the characteristics of directors, boards, ...
Determinants of Independent Director Compensation: An Exploratory Study in a Socialist Capitalist EconomyAdithipyangkul, Pattarin; Leung, T.Y. (2012)This paper examines the determinants of Chinese independent director compensation by considering (i) director characteristics such as age, gender, education level, professional expertise, and experience, (ii) board ...
Methodology for capturing environmental, social and economic implications of industrial symbiosis in heavy industrial areasKurup, Biji R. (2007)Industrial operations have been attributed to causing social and environmental problems such as: acid rain; greenhouse gas emissions, air, water and soil pollution; plus health problems to neighbourhood communities. With ...