Abstract
Purpose – This paper contributes to the discussion on the executives’ team and firm performance by investigating the relationships between executives’ compensation, management gender diversity and firm financial performance in GEM listed firms in China.
Design/methodology/approach – Data are collected from 461 companies listed on GEM boards during the period from year 2016 to 2018. Specifically, executives’ compensation and female executives are set as the independent variables, and the proxy selected of corporate performance is Tobin’s Q ratio.
Findings - The results show that the correlation between corporate performance and executive cash payment is not significant, while executives’ equity-based compensation shows a significant positive correlation with firm performance. In addition, the participation of female executives is negatively associated with firm performance.
Implication – The results have practical implications for governments, policymakers, and regulatory authorities, by indicating the importance of women to corporate success. In particular, the findings of this paper emphasize the specific background of GEM in China and provides empirical support for the value of women's participation in corporate governance. In addition, the finding on the relationship between executive compensation and corporate performance of GEM listed companies provides guidance for the establishment of performance compensation system of GEM listed companies in China.
Originality / value – This paper provides new evidence for the current literature of executive’s team and corporate performance. This is the first paper to adopt triangulation in theories from different disciplines including optimal contractual approach, managerial power approach as new perspectives of agency theory, upper echelons theory, motivational-hygiene theory and women leadership style theory. The results will contribute to provide guidance for enterprises to formulate an efficient compensation system and build a reasonable senior management team structure.
Design/methodology/approach – Data are collected from 461 companies listed on GEM boards during the period from year 2016 to 2018. Specifically, executives’ compensation and female executives are set as the independent variables, and the proxy selected of corporate performance is Tobin’s Q ratio.
Findings - The results show that the correlation between corporate performance and executive cash payment is not significant, while executives’ equity-based compensation shows a significant positive correlation with firm performance. In addition, the participation of female executives is negatively associated with firm performance.
Implication – The results have practical implications for governments, policymakers, and regulatory authorities, by indicating the importance of women to corporate success. In particular, the findings of this paper emphasize the specific background of GEM in China and provides empirical support for the value of women's participation in corporate governance. In addition, the finding on the relationship between executive compensation and corporate performance of GEM listed companies provides guidance for the establishment of performance compensation system of GEM listed companies in China.
Originality / value – This paper provides new evidence for the current literature of executive’s team and corporate performance. This is the first paper to adopt triangulation in theories from different disciplines including optimal contractual approach, managerial power approach as new perspectives of agency theory, upper echelons theory, motivational-hygiene theory and women leadership style theory. The results will contribute to provide guidance for enterprises to formulate an efficient compensation system and build a reasonable senior management team structure.
| Original language | English |
|---|---|
| Pages (from-to) | 115-142 |
| Number of pages | 28 |
| Journal | International Journal of Accounting and Information Management |
| Volume | 30 |
| Issue number | 1 |
| Early online date | 7 Dec 2021 |
| DOIs | |
| Publication status | Published - 1 Feb 2022 |
Keywords
- gender diversity
- executives' compensation
- firm performance
- Chinese GEM listed firms
