Politically connected CEOs, firm performance, and CEO pay

Huiying Wu; Sihai Li; Sammy Xiaoyan Ying; Xuan Chen

doi:10.1016/j.jbusres.2018.06.003

Politically connected CEOs, firm performance, and CEO pay

Huiying Wu, Sihai Li, Sammy Xiaoyan Ying, Xuan Chen

Western Sydney University

Research output: Contribution to journal › Article › peer-review

Abstract

This study examines the role of executive political connections in shaping executive compensation strategies in private Chinese firms, given the importance of political connections in securing political legitimacy and government-controlled resources in China. Our results show that the political connections of CEOs have a positive impact on both firm performance and CEO pay, and that this impact is stronger in less-developed regions. Further analyses indicate that, for CEOs with local political connections, the positive impact is not affected by regional economic development. Our findings reveal the importance of CEOs' political connections and demonstrate that such connections play a role in determining executive compensation.

Original language	English
Pages (from-to)	169-180
Number of pages	12
Journal	Journal of Business Research
Volume	91
DOIs	https://doi.org/10.1016/j.jbusres.2018.06.003
Publication status	Published - 2018

Keywords

China
chief executive officers
political activity
private companies
salaries

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1016/j.jbusres.2018.06.003

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title = "Politically connected CEOs, firm performance, and CEO pay",

abstract = "This study examines the role of executive political connections in shaping executive compensation strategies in private Chinese firms, given the importance of political connections in securing political legitimacy and government-controlled resources in China. Our results show that the political connections of CEOs have a positive impact on both firm performance and CEO pay, and that this impact is stronger in less-developed regions. Further analyses indicate that, for CEOs with local political connections, the positive impact is not affected by regional economic development. Our findings reveal the importance of CEOs' political connections and demonstrate that such connections play a role in determining executive compensation.",

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language = "English",

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T1 - Politically connected CEOs, firm performance, and CEO pay

AU - Wu, Huiying

AU - Li, Sihai

AU - Ying, Sammy Xiaoyan

AU - Chen, Xuan

PY - 2018

Y1 - 2018

N2 - This study examines the role of executive political connections in shaping executive compensation strategies in private Chinese firms, given the importance of political connections in securing political legitimacy and government-controlled resources in China. Our results show that the political connections of CEOs have a positive impact on both firm performance and CEO pay, and that this impact is stronger in less-developed regions. Further analyses indicate that, for CEOs with local political connections, the positive impact is not affected by regional economic development. Our findings reveal the importance of CEOs' political connections and demonstrate that such connections play a role in determining executive compensation.

AB - This study examines the role of executive political connections in shaping executive compensation strategies in private Chinese firms, given the importance of political connections in securing political legitimacy and government-controlled resources in China. Our results show that the political connections of CEOs have a positive impact on both firm performance and CEO pay, and that this impact is stronger in less-developed regions. Further analyses indicate that, for CEOs with local political connections, the positive impact is not affected by regional economic development. Our findings reveal the importance of CEOs' political connections and demonstrate that such connections play a role in determining executive compensation.

KW - China

KW - chief executive officers

KW - political activity

KW - private companies

KW - salaries

UR - http://handle.westernsydney.edu.au:8081/1959.7/uws:47336

U2 - 10.1016/j.jbusres.2018.06.003

DO - 10.1016/j.jbusres.2018.06.003

M3 - Article

SN - 0148-2963

VL - 91

SP - 169

EP - 180

JO - Journal of Business Research

JF - Journal of Business Research

ER -

Politically connected CEOs, firm performance, and CEO pay

Abstract

Keywords

UN SDGs

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