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SAMMS020.pdf
Article Title : Executive Compensation and Firm Value Evidence from the Perspective of Investor Protection in China
Author(s) : Chunxiao Zhao
Corresponding Author : Chunxiao Zhao
Keywords : Salary incentive; Enterprise value; Media coverage; Legal environment.
PDF : http://download.BCPub.org/proceedings/2021/SAMMS2021/SAMMS020.pdf
Abstract

This study examines the influence of executive compensation on firm value from the perspective of investor protection, and its research samples are China's A-share public firms from 2013 to 2017. According to the results, the increase in executive compensation facilitates the enhancement of corporate value. In addition, media coverage and legal environment play a positive role in regulating the executive compensation's relationship with firm value. There is a reciprocal relationship between media attention and legal environment, that is, in regions with a poor legal environment, media has a stronger moderating effect on executive compensation and corporate value. Further analysis shows that, compared with positive media coverage, negative media coverage weakens the positive correlation between executive compensation and corporate value. Moreover, in different life cycles, executive compensation has different effects on the improvement of enterprise value. The results show that media supervision and legal protection are effective ways to promote compensation incentives to maximize shareholder wealth in countries with economic transitions, and provide theoretical support and empirical evidence for promoting the investor protection of China's listed companies.

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