IDEAS home Printed from https://ideas.repec.org/a/eee/riibaf/v74y2025ics0275531924004884.html
   My bibliography  Save this article

Common institutional ownership and executive pay-performance sensitivity: Mediating role of information transparency and fund occupation

Author

Listed:
  • Mou, Shaobo
  • Yi, Sijia
  • Zhang, Qiufeng
  • Liu, Danping

Abstract

Research in corporate governance highlights the development of executive compensation contracts as a crucial strategy for mitigating agency conflicts. This study uses the pay-performance sensitivity (PPS) of executives as a metric to evaluate the effectiveness of compensation agreements, specifically examining the influence of common institutional ownership (CIO) with data from publicly traded companies between 2009 and 2022. The findings reveal the existence of PPS and its amplification through CIO, a conclusion that remains robust after conducting various tests. Moreover, the research identifies two mediating effects: information transparency and fund occupation. The co-governance role of CIO is found to be more pronounced in the eastern region, within state-owned enterprises, and in contexts characterized by higher agency costs and greater equity concentration. These insights deepen our understanding of the governance synergies associated with CIO, offering both theoretical and empirical foundations for the design of executive compensation contracts.

Suggested Citation

  • Mou, Shaobo & Yi, Sijia & Zhang, Qiufeng & Liu, Danping, 2025. "Common institutional ownership and executive pay-performance sensitivity: Mediating role of information transparency and fund occupation," Research in International Business and Finance, Elsevier, vol. 74(C).
    • Handle: RePEc:eee:riibaf:v:74:y:2025:i:c:s0275531924004884
    DOI: 10.1016/j.ribaf.2024.102695
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0275531924004884
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ribaf.2024.102695?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:riibaf:v:74:y:2025:i:c:s0275531924004884. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ribaf .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.