Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments May 19, 2022 erstellt
Description:
We examine the role of political uncertainty in executive compensation for Chinese listed firms from 2005 to 2018. Using detailed disclosure of turnover of chief officials at the municipal level, we find that political uncertainty reduces executive compensation-performance sensitivity. The negative effect is more pronounced for firms having lower internal control quality, lower analyst coverage, and executives without financial backgrounds. Political uncertainty attenuates compensation-performance sensitivity through reduced information disclosure quality and increased executive perquisites. Further evidence shows that political uncertainty increases the stickiness of executive compensation and turnover probability. Our findings demonstrate that political uncertainty undermines the effectiveness of executive compensation contracts