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CEOs’ power and perks: Evidence from Chinese banks

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  • Ting, Hsiu-I
  • Huang, Po-Kai

Abstract

In this paper, we investigate the relation between CEOs’ power and their perks in Chinese banks over the period from 1999 to 2011 period. We find that banks with more powerful CEOs, as measured by the CEO as the only insider and the CEO’s directorships, provide greater perks. This finding could be explained by social needs and monitoring difficulties but not by entrenchment. Powerful CEOs tend to maintain connections or “guanxi” by building political ties and attending more business entertainment activities. They also have lower pay-performance sensitivity. Only a gender-diverse board provides better monitoring to reduce perks.

Suggested Citation

  • Ting, Hsiu-I & Huang, Po-Kai, 2018. "CEOs’ power and perks: Evidence from Chinese banks," Journal of Economics and Business, Elsevier, vol. 97(C), pages 19-27.
    • Handle: RePEc:eee:jebusi:v:97:y:2018:i:c:p:19-27
    DOI: 10.1016/j.jeconbus.2018.02.003
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    More about this item

    Keywords

    Perquisites; CEO power; Entrenchment; Social need; Gender-diverse board;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation

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