Asian Business & Management

, Volume 11, Issue 2, pp 171–193

Managerial compensation structure and firm performance in Chinese PLCs

  • Larry Su
Original Article


In this article, I examine whether and to what extent intra-firm compensation structure affects managerial incentives and firm performance. Using an unbalanced panel consisting of a total of 43 626 executives in 1362 publicly listed corporations in China during 1999–2007, I find that pay rewards increase as executives move up the corporate hierarchy and that the largest pay gap is between first- and second-tier executives. Pay dispersion is positively related to the number of tournament participants, level of risk in the business environment and firm performance. Moreover, state ownership and corporate governance play some role in determining managerial pay dispersion and firm performance. The empirical results are consistent with tournament theory and against equity, relative deprivation and sabotage theories of managerial compensation.


managerial compensation tournament theory human resource management publicly listed corporations China 


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Copyright information

© Palgrave Macmillan, a division of Macmillan Publishers Ltd 2012

Authors and Affiliations

  • Larry Su
    • 1
  1. 1.Department of International BusinessSchool of Business, University of GreenwichLondonUK

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