Abstract
Given the vital role of independent directors in determination of executives’
compensation, we explore how independent directors view the CEO pay disparity. Using
the data of all companies listed on the Shenzhen and Shanghai stock exchanges for the
period 2005 to 2015, we find that the proportion of independent directors on the board is
negatively associated with the extent to which executives’ pay is dispersed. This finding
suggests that independent directors view the dispersion of the CEO’s and other executive
directors’ pay from the managerial power theory perspective rather than from the
tournament theory
Muhammad Abubakkar Siddique, Shagufta Jafar, Muhammad Usman. (2019) How Do Independent Directors View CEO Pay Disparity in China? , Pakistan Journal of Commerce and Social Sciences, Volume 13, Issue 1.
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