Chapter
C. How the Interaction beteween Managerial Discretion and CEO Compensation Influence Firm Performance?
1.3.2. Research Framework
HI: There is a Significant Relationship between Managerial Discretion and CEO Compensation, and the Relationship is Moderated by Monitoring Intensity
HII: The Match Degree between Managerial Discretion and CEO Compensation is Significantly Positively Related with Firm Performance
1.3.3. Research Meaning and Objective
1.4. RESEARCH IDEAS AND BOOK SCHEDULE
A. Starting Points of the Research
Chapter 2: MEASUREMENT OF MANAGERIAL DISCRETION AND MONITORING INTENSITY
2.1. EFFECT OF MANAGERIAL DISCRETION IS UP TO MONITORING INTENSITY
2.1.1. Absence of Monitoring is the Sticking Point During the Reform of the State-Owned Enterprises in China
2.1.2. Validity of the Power Allocation System Inside the Corporation is Codetermined by Managerial Discretion and Monitoring Intensity
2.1.3. There is Significant Difference in Corporate Governance between the Western Countries and China
2.2. MEASUREMENT OF MANAGERIAL DISCRETION
2.2.1. The Concept of Managerial Discretion in Corporate Governance
2.2.2. Review on the Measurement Methods of Managerial Discretion
2.2.3. Sources and Dimensions of Managerial Discretion
A. Structural Position Power
C. Resources Operation Power
2.2.4. Measurement Variable Definition of Managerial Discretion
A. Structural Position Power
C. Resources Operations Power
2.3. CHOICE OF MONITORING INTENSITY MEASUREMENT METHOD
2.3.1. Lack of External Monitoring
2.3.2. Composition of Internal Monitoring
A. Shareholder Monitoring Intensity
B. Board Monitoring Intensity
2.3.3. The Choice of Indicators Measuring Shareholders Monitoring Intensity
A. Number of Shareholders Meetings
B. Attribute of Controlling Shareholders
C. Ratio of Share Being Present at the Shareholders Meetings
D. Ratio of the First Large Shareholder
2.3.4. Choice of Indicators Measuring the Board of Directors Monitoring Intensity
A. Ratio of the Independent Directors
B. Ratio of Share-Holding Affiliated Directors
C. Number of Secondary Committees
D. Number of the Board of Directors Meetings
2.4. TESTING OF MEASUREMENT INDICES SYSTEM OF MANAGERIAL DISCRETION
2.4.1. Sample Selection and Data Description
2.4.2. Exploratory Factor Analysis of Managerial Discretion
2.4.3. Confirmatory Factor Analysis of Managerial Discretion
2.4.4. Results Comparison with Eric Questionnaire
2.5. TESTING OF MEASUREMENT INDICES SYSTEM OF MONITORING INTENSITY
2.5.1. Sample Selection and Data Description
2.5.3. Test on the Relationship Among Managerial Discretion, Monitoring Intensity and Firm Performance
2.6. SUMMARIZATION OF CHAPTER II
1) To Construct and Test the Measurement Indices Systems of Managerial Discretion and Monitoring Intensity Based on the Pubic Reports of Listed Firm in China
(2) The Effect of Managerial Discretion on Firm Performance is Up to Monitoring Intensity
Chapter 3:
MANAGERIAL DISCRETION, CEO PAY LEVEL AND FIRM PERFORMANCE
3.1. LITERATURE REVIEW ON CEO PAY LEVEL AND ITS EFFECT ON FIRM PERFORMANCE
3.1.1. Empirical Study on the Determining Factors of CEO Pay Level
A. CEO Pay Level in the Principal-Agent Theory
B. CEO Pay Level in Human Capital Theory
C. CEO Pay Level in Managerial Discretion Approach
3.1.2. Literature on the Improvement Effect of CEO Pay Level on Firm Performance
3.1.3. Literature Comment and Research Question
3.2.1. Hypotheses on the Manipulation Effect of Managerial Discretion on CEO Pay Level
3.2.2. Hypotheses on the Relationship Among Managerial Discretion, CEO Pay Level and Firm Performance
3.3. VARIABLES DESIGN AND SAMPLE DATA
A. Test without Control Variables
B. Test of H1 with Control Variables
3.5. DISCUSSION: MONITORING INTENSITY AND ITS MANIPULATION EFFECT ON CEO PAY LEVEL
A. To Measure Manipulation Effect by Adopting the Sub-Samples with Different Firm Performance
B. To Measure Manipulation Effect of Managerial Discretion on CEO Pay Level
3.6. SUMMARIZATION OF CHAPTER III
(1) CEO Can Misuse Managerial Discretion in Manipulating His or Her Own Pay Level for Chinese Listed Firms and Thus Acquire a Pay Exceeding the Reasonable Level
(2) The Match Degree between CEO Pay Level and Managerial Discretion Does Not Improve Firm Performance in China in General, Except When Monitoring Intensity is Higher
(3) Monitoring Intensity Can Effectively Restrain the Manipulation Effect of Managerial Discretion on CEO Pay Level
Chapter 4:
MANAGERIAL DISCRETION, CEO PAY-PERFORMANCE SENSITIVITY AND FIRM PERFORMANCE
4.1. LITERATURE REVIEW AND PROBLEM CLARIFICATION
4.1.1. Review on the Study on the Determining Factors of CEO Pay-Performance Sensitivity
4.1.2. Review on the Study on the Effect of CEO Pay-Performance Sensitivity on Firm Performance
4.1.3. Literature Comment and Chapter Outline
4.2. MODEL ON CEO PAY-PERFORMANCE SENSITIVITY BASED ON
MANAGERIAL DISCRETION
4.3.1. Hypothesis on the Relationship Between Managerial Discretion and
Pay-Performance Sensitivity of CEO
H4-1. There is a Significant Negative Relationship between Managerial Discretion and CEO Pay-Performance Sensitivity
H4-1a. Compared with the Firms with Lower Managerial Discretion, there is a Higher Negative Relationship between Managerial Discretion and CEO Pay-Performance Sensitivity for Firms with Higher Managerial Discretion
H4-1b. Compared with Listed Firms with Higher Monitoring Intensity, there is a Much Stronger Negative Relationship between Managerial Discretion and CEO Pay-Performance Sensitivity for Listed Firms with Lower Monitoring Intensity
H4-1c. Compared with the Listed Firms with Higher Performance, there is a Much Stronger Negative Relationship between Managerial Discretion and CEO Pay-Performance Sensitivity for the Listed Firms with Lower Performance
H4-1d. Compared with the Profitable Profit-Making Firms, there is a Much Stronger Negative Relationship between Managerial Discretion and CEO Pay-Performance Sensitivity for the Deficit Firms.
4.3.2. Hypothesis on the Relationship among Managerial Discretion, CEO Pay-Performance Sensitivity and Firm Performance
H4-2. A Higher CEO Pay-Performance Sensitivity Can Improve the Positive Effect of Managerial Discretion on Firm Performance
4.4. EMPIRICAL METHOD DESIGN
4.4.1. Empirical Model Construction
4.4.2. Variable Definition
4.4.4. The Estimation of CEO Pay-Performance Sensitivity for ChineseListed Firms
4.5.2. Tests of H4-1a, H4-1-b, H4-1c, H4-1d
A. Robustness Test of H4-1
B. Robustness Test of H4-1a, H4-1b, H4-1c and H4-1d
C. Robustness Test of H4-2
4.6. SUMMARIZATION OF CHAPTER IV
(1) Managerial Discretion Has the Significant Negative Effect on Pay-Performance Sensitivity of CEO and High Managerial Discretion without Monitoring is the Critical Factor Leading to the Persistent Low Pay-Performance Sensitivity of CEO for Chinese Listed Firms
(2) CEO Pay-Performance Sensitivity Can Improve the Investment in Specialized Human Capital of CEO, and thus Improve the Benefits Derived From the Professional Operation of Managerial Discretion, and Finally Improve the Positive Effect of Managerial Discretion on Firm Performance
Chapter 5:
MANAGERIAL DISCRETION, MANAGERIAL PAY GAP AND FIRM PERFORMANCE
5.1. LITERATURE REVIEW ON DETERMINING FACTORS OF MANAGERIAL PAY GAP AND ITS EFFECT ON FIRM PERFORMANCE
5.1.1. Literatures on the Determining Factors of Managerial Pay Gap
A. Industry Environment Factors
B. Corporation Governance Factors
5.1.2. Literatures on the Effect of Managerial Pay Gap on Firm Performance
A. Managerial Pay Gap and Firm Performance in Tournament Theory
B. Managerial Pay Gap and Firm Performance in Organizational Justice Theory
5.1.3. Research Questions and Chapter Outline
5.2. MODEL ON CEO PAY-PERFORMANCE SENSITIVITY BASED ON
MANAGERIAL DISCRETION
5.3.1. Effect of Managerial Discretion on Managerial Pay Gap
Hypothesis 5-1. Managerial Discretion Has a Significant Positive Effect on
Managerial Pay Gap
Hypothesis 5-1a. In Firms with Good Corporate Governance, Managerial Discretion Has a Stronger Positive Effect on Managerial Pay Gap.
5.3.2. Effect of Managerial Discretion on Firm Performance
Hypothesis 5-2. There is a Significant Inverse U-Shaped Relation between Managerial Discretion and Firm Performance
5.3.3. Moderating Effect of Managerial Pay Gap on Relationship between Managerial Discretion and Firm Performance
Hypothesis 5-2a. Larger Managerial Pay Gap is Helpful to the Positive Effect of Managerial Discretion on Firm Performance.
5.4.1. Variables Definition
5.4.5. Tests of H5-2 and H5-2a
5.5.1. The Inverted U-Shaped Relationship between Managerial Discretion and Managerial Pay Gap
5.5.2. Managerial Discretion and Total Sum of Managerial Pay
5.6. SUMMARIZATION OF CHAPTER V
(1) There is a Significant Inverted U-Shaped Curve between Managerial Discretion and Managerial Pay Gap, and Monitoring Intensity Can Facilitate that the Turning Point of the Curve Between the Two Variables Moves Toward Right for Chinese Listed Firms
(2) Managerial Pay Gap Can Improve the Internal Monitoring of the Other Top Managers on CEO and Constrain CEO’s Misuse Of Managerial Discretion, and thus the Specialized Operation Benefits of Managerial Discretion Can Be Maximized, and Finally the Positive Effect of Managerial Discretion on Firm Performance is Enhanced
(3)Managerial Discretion Can Manipulate the Total Sum of Managerial Pay, and the Excessive Enlargement of Managerial Discretion Will Lead to an Excessive Expansion of the Total Sum of Managerial Pay
Chapter 6: CONCLUSIONS AND RESEARCH PROSPECTS
(1) The Book Constructs the Measurement Indices Systems of Managerial Discretion and Monitoring Intensity Based on Public Reports of Chinese Listed Firms, and Further Empirically Proves that the Effect Of Managerial Discretion on Firm Performance is Up to Monitoring Intensity
(2) The Book Empirically Tests the Existence of Manipulation Effect of Managerial Discretion on CEO Pay Level, and Proposes the Influencing Curve of Monitoring Intensity on Manipulation Effect
3) The Book Constructs CEO Pay-Performance Sensitivity Model Based on Managerial Discretion, and Empirically Proves that the Weakness (or Sometimes Lack) of Monitoring Intensity is the Critical Factor for the Persistent Lower CEO Pay-Performance Sensitivity
(4) The Book Finds Out that there Are Limitations for the Tournament Theory To Explain Managerial Pay Gap, And Empirically Proves that the Enlargement Of Managerial Discretion Will Finally Lead to the Excessive Increase of Total Sum of Managerial Pay and the Obvious Decrease of Managerial Pay Gap, and Further Demonstrates that Monitoring Intensity Can Restrain Such a Manipulation Effect
(5) The Book Empirically Proves that the Moderate Increase of CEO Pay-Performance Sensitivity and Managerial Pay Gap Can Simultaneously Improve the Positive Effect of Managerial Discretion on Firm Performance And Constrain the Negative Effect of Managerial Discretion on Firm Performance
(5) The Book Empirically Proves that the Moderate Increase of CEO Pay-Performance Sensitivity and Managerial Pay Gap Can Simultaneously Improve the Positive Effect of Managerial Discretion On Firm Performance and Constrain the Negative Effect of Managerial Discretion on Firm Performance
APPENDIX I. ERIC QUESTIONNAIRE ON MANAGERIAL DISCRETION
Manipulation Effect of Managerial Discretion on Managerial Compensation: Evidence from Listed Firms in China
( Management Science - Theory and Applications )
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