Research on the Impact of Executive Remuneration and Independent Director Ratio on Corporate Performance in Listed Companies
Keywords:
Executive Remuneration, Independent Directors Ratio, Corporate Performance, Mediating Effect, Multivariable Linear Regression ModelAbstract
This paper evaluates the impact of executive remuneration and the ratio of independent directors on corporate performance, using data from listed companies from 2008 to 2019. The findings reveal that (1) executive remuneration is significantly and positively related to corporate performance, while the ratio of independent directors is significantly and negatively associated with corporate performance. Higher executive remuneration notably enhances corporate performance, whereas a larger proportion of independent directors appears to correlate with a decline in corporate performance. (2) Regarding the underlying mechanism, Tobin's Q plays both a full and partial mediating role in the effects of executive remuneration and the ratio of independent directors on corporate performance, respectively. (3) Heterogeneity analysis shows that the positive impact of executive remuneration on corporate performance is more pronounced in state-owned listed firms than in non-state-owned listed firms. Lastly, based on both empirical and theoretical research, this paper proposes recommendations to help improve corporate performance and foster competitive advantages for enterprises.
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