Manipulation Effects of Managerial Discretion on Executive Compensation: A Comparative Study between Fresh CEOs and Senior CEOs

Name: Manipulation Effects of Managerial Discretion on Executive Compensation: A Comparative Study between Fresh CEOs and Senior CEOs
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Changzheng Zhang
School of Economics & Management, Xi’an University of Technology, Shanxi Xi’an, China

Series: Economic Issues, Problems and Perspectives
BISAC: BUS104000

Facing with the ever increasing change of the business environment, the firms have recognized that their persistent competitive edge increasingly depends on whether or not they own the dedicated, experienced and capable CEOs. In the global practice, more and more firms have tried, or are trying, or will try to change their CEOs in order to get higher firm performance or just to get out of recession. Especially it is true in China.

However, in theory, the literature in the related fields, such as the corporate governance, the strategic human resource management, the strategy management, the principal-agent theory and so on, has only addressed how to arrange managerial discretion and executive compensation reasonably under the normal circumstances, while ignoring the conditions of CEO change. Therefore, each stakeholder in the post-CEO change period has no clear theoretical guidances on how to reallocate managerial discretion and reset executive compensation for the fresh CEOs. Such a theoretical research gap has leaded to a large number of failures in the issue of CEO change. In order to make up this gap, this book tries to investigate the relationship between managerial discretion and executive compensation under the conditions of CEO change, which can not only practically guide the re-balancing of the corporate governance and further improve the success possibility of CEO change, but can theoretically enrich the contributions in managerial discretion approach and executive compensation theory.

Based on the comparative study perspective, by drawing on the data from Chinese listed companies as the sample and adopting the Correlation Analysis, Multiple Linear Regression and Hierarchical Models as the statistical analysis methods, the book investigates how managerial discretion, respectively for the fresh CEOs and the senior CEOs, manipulates each dimension of executive compensation, i.e. executive compensation level, CEO pay-performance sensitivity, executive compensation gap and executive-employee compensation gap. The book makes two valuable new findings: First, the book confirms that both the fresh CEOs and the senior CEOs have the motives and capabilities to manipulate each dimension of executive compensation, but varying by intent and intention; Second, the book proves that the fresh CEOs show higher firm-serving motives when they manipulate each dimension of executive compensation by performing managerial discretion, while the senior CEOs show relatively higher self-serving motives. Based on the research results, the book builds the fresh-keeping mechanisms of firm-serving motives of the fresh CEOs during their whole CEO tenure, which are of great meanings for the government, the scholars and the practitioners and so on. (Imprint: Nova)

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ISBN: N/A Categories: Business and Corporate Economics, Business and Economics, Economic Issues, Problems and Perspectives, Economics, Social Sciences Tags: 9781634840453, 9781634846806, Business and Corporate Economics

Table of Contents
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Table of Contents

Preface

Chapter 1. Book Introduction

Chapter 2. An Exploratory Study on the Link Between Managerial Discretion and Managerial Power

Chapter 3. A Comparative Study on the Manipulation Effects of Managerial Discretion on Executive Compensation Level Between the Fresh CEOs and the Senior CEOs

Chapter 4. Effects of Managerial Discretion on CEO Pay-Performance Sensitivity: The Moderating Role of CEO Tenure

Chapter 5. Effects of Managerial Discretion on Executive Compensation Gap: The Moderating Role of CEO Tenure

Chapter 6. Manipulation Effects of Managerial Discretion on Executive-Employee Pay Gap: A Comparative Study Between the Senior CEOs and the Fresh CEOs

Chapter 7. Fresh-Keeping Mechanisms of the Fresh CEOs’ Firm-Serving Motives in Performing Managerial Discretion

Author’s Contact Information

Index

References

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