Does hometown connection between chairmen and CEOs improve compensation–performance sensitivity in China?
Abstract Based on a the micro dataset set of private Chinese-listed companies, this study examines the in detail the impact of hometown connections between chief executive officers (CEOs) and chairmen on CEO compensation–performance sensitivity. The empirical results suggest that a hometown connecti...
| Main Authors: | , , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Springer Nature
2023-02-01
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| Series: | Humanities & Social Sciences Communications |
| Online Access: | https://doi.org/10.1057/s41599-023-01549-6 |
| _version_ | 1811166025778987008 |
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| author | Di Wang Zhanchi Wu Junjie You Bangzhu Zhu Rongwu Zhang |
| author_facet | Di Wang Zhanchi Wu Junjie You Bangzhu Zhu Rongwu Zhang |
| author_sort | Di Wang |
| collection | DOAJ |
| description | Abstract Based on a the micro dataset set of private Chinese-listed companies, this study examines the in detail the impact of hometown connections between chief executive officers (CEOs) and chairmen on CEO compensation–performance sensitivity. The empirical results suggest that a hometown connection prompts both the chairman and the CEO to pay more attention to their reputations, which improves CEO compensation–performance sensitivity. This hometown effect is more pronounced when the hometown culture is strong and the degree of marketization is high. The mechanism test reveals that an externally hierd CEO strengthens the influence of a hometown connection on CEO compensation–performance sensitivity, however, this influence weakens with increasing CEO tenure. Overall, this study enriches the literature on informal institutions and compensation contracts and provides valuable insights for company managers and policymakers in emerging markets. |
| first_indexed | 2024-04-10T15:46:47Z |
| format | Article |
| id | doaj.art-c787ced85a82406c837a28b2714e5c13 |
| institution | Directory Open Access Journal |
| issn | 2662-9992 |
| language | English |
| last_indexed | 2024-04-10T15:46:47Z |
| publishDate | 2023-02-01 |
| publisher | Springer Nature |
| record_format | Article |
| series | Humanities & Social Sciences Communications |
| spelling | doaj.art-c787ced85a82406c837a28b2714e5c132023-02-12T12:06:54ZengSpringer NatureHumanities & Social Sciences Communications2662-99922023-02-0110111210.1057/s41599-023-01549-6Does hometown connection between chairmen and CEOs improve compensation–performance sensitivity in China?Di Wang0Zhanchi Wu1Junjie You2Bangzhu Zhu3Rongwu Zhang4Management School, Jinan UniversityManagement School, Jinan UniversityManagement School, Jinan UniversityGuangxi UniversityGuangzhou UniversityAbstract Based on a the micro dataset set of private Chinese-listed companies, this study examines the in detail the impact of hometown connections between chief executive officers (CEOs) and chairmen on CEO compensation–performance sensitivity. The empirical results suggest that a hometown connection prompts both the chairman and the CEO to pay more attention to their reputations, which improves CEO compensation–performance sensitivity. This hometown effect is more pronounced when the hometown culture is strong and the degree of marketization is high. The mechanism test reveals that an externally hierd CEO strengthens the influence of a hometown connection on CEO compensation–performance sensitivity, however, this influence weakens with increasing CEO tenure. Overall, this study enriches the literature on informal institutions and compensation contracts and provides valuable insights for company managers and policymakers in emerging markets.https://doi.org/10.1057/s41599-023-01549-6 |
| spellingShingle | Di Wang Zhanchi Wu Junjie You Bangzhu Zhu Rongwu Zhang Does hometown connection between chairmen and CEOs improve compensation–performance sensitivity in China? Humanities & Social Sciences Communications |
| title | Does hometown connection between chairmen and CEOs improve compensation–performance sensitivity in China? |
| title_full | Does hometown connection between chairmen and CEOs improve compensation–performance sensitivity in China? |
| title_fullStr | Does hometown connection between chairmen and CEOs improve compensation–performance sensitivity in China? |
| title_full_unstemmed | Does hometown connection between chairmen and CEOs improve compensation–performance sensitivity in China? |
| title_short | Does hometown connection between chairmen and CEOs improve compensation–performance sensitivity in China? |
| title_sort | does hometown connection between chairmen and ceos improve compensation performance sensitivity in china |
| url | https://doi.org/10.1057/s41599-023-01549-6 |
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