Pay disparity within top management teams, real earnings management, and firm value : destructive competition or value creation? : a moderated mediating model

This article examines the impact of pay disparity within the top management team (TMT) on real earnings management. Using data from Chinese listed firms for the period 2007 to 2018, we find that pay disparity within TMT has a negative impact on real earnings management and this relationship further enhances firms' value, which supports internal governance view. Moreover, the indirect effect is stronger when product market competition is high. Results hold for both accounting and market firm value measures.

Keywords: Pay disparity; top management team; real earnings management; product market competition; firm value

I. Introduction

Pay disparity within the top management team (TMT) is well documented in the literature. Prior studies on pay disparity within TMT focus on developed economies (Park [7]; Siegel and Hambrick [9]). Limited studies pay attention to an emerging market. Based on the internal governance view, pay disparity within TMT can reduce real activities manipulation by urging CEO to improve governance structure (Adams, Almeida, and Ferreira [1]) and restricting other TMT executives to achieve excess interest through managing earnings (Mande and Son [6]). However, some recent studies show that destructive competition for advancement to the CEO position may in turn increase real earnings management (Park [7]). On the other hand, the effect of pay disparity on real earnings management may further influence firm value. The real earnings management activities enable managers to meet short-run earnings targets but unlikely to increase firm value (Roychowdhury [8]). Therefore, restricting real earnings management could improve internal governance which benefits firms' value creation.

Since the split share structure reform, the Chinese government has undertaken a series of reforms for privatization and to liberalize salary policy, which causes more obvious pay disparity within TMT. In 2019, the growth rate of average compensation and pay disparity within TMT are up to 11% and 40%, respectively.[1] This phenomenon raised an interesting question: pay disparity, enhance firm value by improving internal governance, or lead to the destructive internal competition?

Under this background, we examine the effect of pay disparity on real earnings management and whether this relationship further influencing firms' value. Using OLS and path analysis, we find that pay disparity ease real earnings management, and further enhance firms' value. Moreover, the indirect effect is stronger when product market competition is high.

This article contributes to the literature in three ways. First, pay disparity within TMT and real earnings management are positively related in a developed economy (Park [7]). We complement contrary evidence in the largest emerging economy, consistent with internal governance view. Second, to the best of our knowledge, this is the first study to investigate whether pay differentials create both short-term and long-term values by restricting real earnings management activities. Third, this study explores the moderated mediating relationship explaining pay disparity, real earnings management, and product market competition in promoting firm value.

II. Model and variables

Data

Our sample consists of 14,313 firm-year observations (2610 non-financial listed firms) in China for the period 2007 to 2018. Data come from the CSMAR Database. To mitigate the impact of outliers, we winsorize the main variables at 1% and 99% levels.

Model and variable definitions

To examine the effect of pay disparity within TMT on real earnings management, we use OLS to estimate Equation (1). Then, by using path analysis to jointly estimate Equations (1) and (3), we further investigate whether pay disparity restrains real earnings management, thereby improving firms' value. Finally, we test the moderating effect of product market competition by jointly estimating Equations (2) and (3).

(1)

Graph

$\mathrm{R}\mathrm{A}{\mathrm{M}}_{\mathrm{i}\mathrm{t}}={\alpha }_1\mathrm{L}\mathrm{N}\mathrm{G}\mathrm{A}{\mathrm{P}}_{\mathrm{i}\mathrm{t}}+\mathrm{C}\mathrm{O}\mathrm{N}\mathrm{T}\mathrm{R}\mathrm{O}{\mathrm{L}}_{\mathrm{i}\mathrm{t}}+{\epsilon }_{\mathrm{i}\mathrm{t}}$

(2)

Graph

$\begin{array}{rl}& \mathrm{R}\mathrm{A}{\mathrm{M}}_{\mathrm{i}\mathrm{t}}={\alpha }_1\mathrm{L}\mathrm{N}\mathrm{G}\mathrm{A}{\mathrm{P}}_{\mathrm{i}\mathrm{t}}+{\alpha }_2\mathrm{L}\mathrm{N}\mathrm{G}\mathrm{A}\mathrm{P}\times \mathrm{A}\mathrm{H}\mathrm{H}{\mathrm{I}}_{\mathrm{i}\mathrm{t}}\\ & +{\alpha }_3\mathrm{A}\mathrm{H}\mathrm{H}{\mathrm{I}}_{\mathrm{i}\mathrm{t}}+\mathrm{C}\mathrm{O}\mathrm{N}\mathrm{T}0\mathrm{R}\mathrm{O}{\mathrm{L}}_{\mathrm{i}\mathrm{t}}+{\epsilon }_{\mathrm{i}\mathrm{t}}\end{array}$

(3)

Graph

$\mathrm{V}\mathrm{A}\mathrm{L}\mathrm{U}{\mathrm{E}}_{\mathrm{i}\mathrm{t}}={\beta }_1\mathrm{L}\mathrm{N}\mathrm{G}\mathrm{A}{\mathrm{P}}_{\mathrm{i}\mathrm{t}}+{\beta }_2\mathrm{R}\mathrm{A}{\mathrm{M}}_{\mathrm{i}\mathrm{t}}+\mathrm{C}\mathrm{O}\mathrm{N}\mathrm{T}\mathrm{R}\mathrm{O}{\mathrm{L}}_{\mathrm{i}\mathrm{t}}+{\epsilon }_{\mathrm{i}\mathrm{t}}$

where

Graph

$\mathrm{R}\mathrm{A}{\mathrm{M}}_{\mathrm{i}\mathrm{t}}$ is real earnings management.

Graph

$\mathrm{L}\mathrm{N}\mathrm{G}\mathrm{A}{\mathrm{P}}_{\mathrm{i}\mathrm{t}}$ is pay disparity within TMT.

Graph

$\mathrm{A}\mathrm{H}\mathrm{H}{\mathrm{I}}_{\mathrm{i}\mathrm{t}}$ is the product market competition.

Graph

$\mathrm{V}\mathrm{A}\mathrm{L}\mathrm{U}{\mathrm{E}}_{\mathrm{i}\mathrm{t}}$ is firm value.

Graph

$\mathrm{C}\mathrm{O}\mathrm{N}\mathrm{T}\mathrm{R}\mathrm{O}{\mathrm{L}}_{\mathrm{i}\mathrm{t}}$ are control variables. The research framework depicted in Figure 1.

Graph: Figure 1. Research framework.

Following Roychowdhury ([8]), we calculate real earnings management (RAM) by three individual measures.

Graph

$\mathrm{R}\mathrm{A}{\mathrm{M}}_{\mathrm{i}\mathrm{t}}=-\mathrm{A}\mathrm{B}\mathrm{C}\mathrm{F}{\mathrm{O}}_{\mathrm{i}\mathrm{t}}+\mathrm{A}\mathrm{B}\mathrm{P}\mathrm{R}\mathrm{O}{\mathrm{D}}_{\mathrm{i}\mathrm{t}}-\mathrm{A}\mathrm{B}\mathrm{D}\mathrm{E}\mathrm{X}{\mathrm{P}}_{\mathrm{i}\mathrm{t}}$

where

Graph

$\mathrm{A}\mathrm{B}\mathrm{C}\mathrm{F}{\mathrm{O}}_{\mathrm{i}\mathrm{t}}$ ,

Graph

$\mathrm{A}\mathrm{B}\mathrm{P}\mathrm{R}\mathrm{O}{\mathrm{D}}_{\mathrm{i}\mathrm{t}}$ and

Graph

$\mathrm{A}\mathrm{B}\mathrm{D}\mathrm{E}\mathrm{X}{\mathrm{P}}_{\mathrm{i}\mathrm{t}}$ are represented abnormal cash flows from operations, abnormal production costs and abnormal discretionary expenses, respectively. The normal levels of three factors are estimated as follows:

Graph

$\frac{\mathrm{C}\mathrm{F}{\mathrm{O}}_{\mathrm{i}\mathrm{t}}}{\mathrm{T}{\mathrm{A}}_{\mathrm{i}\mathrm{t}-1}}={\alpha }_0+{\alpha }_1\frac{1}{\mathrm{T}{\mathrm{A}}_{\mathrm{i}\mathrm{t}-1}}+{\alpha }_2\frac{\mathrm{S}\mathrm{A}\mathrm{L}{\mathrm{E}}_{\mathrm{i}\mathrm{t}}}{\mathrm{T}{\mathrm{A}}_{\mathrm{i}\mathrm{t}-1}}+{\alpha }_3\frac{\mathrm{\Delta }\mathrm{S}\mathrm{A}\mathrm{L}{\mathrm{E}}_{\mathrm{i}\mathrm{t}}}{\mathrm{T}{\mathrm{A}}_{\mathrm{i}\mathrm{t}-1}}+{\epsilon }_{\mathrm{i}\mathrm{t}}$

Graph

$\frac{\mathrm{P}\mathrm{R}\mathrm{O}{\mathrm{D}}_{\mathrm{i}\mathrm{t}}}{\mathrm{T}{\mathrm{A}}_{\mathrm{i}\mathrm{t}-1}}={\alpha }_0+{\alpha }_1\frac{1}{\mathrm{T}{\mathrm{A}}_{\mathrm{i}\mathrm{t}-1}}+{\alpha }_2\frac{\mathrm{S}\mathrm{A}\mathrm{L}{\mathrm{E}}_{\mathrm{i}\mathrm{t}}}{\mathrm{T}{\mathrm{A}}_{\mathrm{i}\mathrm{t}-1}}+{\alpha }_3\frac{\mathrm{\Delta }\mathrm{S}\mathrm{A}\mathrm{L}{\mathrm{E}}_{\mathrm{i}\mathrm{t}}}{\mathrm{T}{\mathrm{A}}_{\mathrm{i}\mathrm{t}-1}}+{\alpha }_4\frac{\mathrm{\Delta }\mathrm{S}\mathrm{A}\mathrm{L}{\mathrm{E}}_{\mathrm{i}\mathrm{t}-1}}{\mathrm{T}{\mathrm{A}}_{\mathrm{i}\mathrm{t}-1}}+{\epsilon }_{\mathrm{i}\mathrm{t}}$

Graph

$\frac{\mathrm{D}\mathrm{E}\mathrm{X}{\mathrm{P}}_{\mathrm{i}\mathrm{t}}}{\mathrm{T}{\mathrm{A}}_{\mathrm{i}\mathrm{t}-1}}={\alpha }_0+{\alpha }_1\frac{1}{\mathrm{T}{\mathrm{A}}_{\mathrm{i}\mathrm{t}-1}}+{\alpha }_2\frac{\mathrm{S}\mathrm{A}\mathrm{L}{\mathrm{E}}_{\mathrm{i}\mathrm{t}}}{\mathrm{T}{\mathrm{A}}_{\mathrm{i}\mathrm{t}-1}}+{\epsilon }_{\mathrm{i}\mathrm{t}}$

where

Graph

$\mathrm{C}\mathrm{F}{\mathrm{O}}_{\mathrm{i}\mathrm{t}}$ is cash flow of operations;

Graph

$\mathrm{P}\mathrm{R}\mathrm{O}{\mathrm{D}}_{\mathrm{i}\mathrm{t}}$ is production costs;

Graph

$\mathrm{D}\mathrm{E}\mathrm{X}{\mathrm{P}}_{\mathrm{i}\mathrm{t}}$ is discretionary expenses;

Graph

$\mathrm{T}{\mathrm{A}}_{\mathrm{i}\mathrm{t}}$ is total assets;

Graph

$\mathrm{S}\mathrm{A}\mathrm{L}{\mathrm{E}}_{\mathrm{i}\mathrm{t}}$ is sales. Equations are cross-sectionally estimated for each industry-year with at least 15 observations. The abnormal levels are the estimated residuals.

The firm value is measured by return on assets (ROA) and Tobin's Q (Q) (Tang and Chang [10]). ROA is calculated as net income divided by the average book value of assets, and Q is calculated as market value divided by the book value of assets. We assess both short-term value (

Graph

$\mathrm{V}\mathrm{A}\mathrm{L}\mathrm{U}{\mathrm{E}}_{\mathrm{i}\mathrm{t}}$ ) and long-term value (

Graph

$\mathrm{V}\mathrm{A}\mathrm{L}\mathrm{U}{\mathrm{E}}_{\mathrm{i}\mathrm{t}+1}$ ,

Graph

$\mathrm{V}\mathrm{A}\mathrm{L}\mathrm{U}{\mathrm{E}}_{\mathrm{i}\mathrm{t}+2}$ ,

Graph

$\mathrm{V}\mathrm{A}\mathrm{L}\mathrm{U}{\mathrm{E}}_{\mathrm{i}\mathrm{t}+3}$ ,

Graph

$\mathrm{V}\mathrm{A}\mathrm{L}\mathrm{U}{\mathrm{E}}_{\mathrm{i}\mathrm{t}+1\sim 3}$ ).

Graph

$ALU{E}_{it+13}=\left(\begin{array}{c}VALU{E}_{it+1}+VALU{E}_{it+2}\\ +VALU{E}_{it+3}\end{array}\right)/3$ .

Pay disparity within TMT (LNGAP) is represented by log-transformed of the difference between the compensation of the CEO and the median compensation of other TMT executives. Product market competition (AHHI) is represented by the adjusted Herfindahl-Hillman index of sales revenue (%) generated by each firm in an industry (for each year) multiplied by negative one. The control variables include CEO education (EDUCATION), board size (BOARD), firm size (SIZE), tangible assets (TANGIABLE), financial leverage (LEVERAGE) and time trend (TREND) (Ali and Zhang [2]; Khalil and Ozkan [5]). Table 1 presents the descriptive statistics and correlation matrix.

Table 1. Descriptive statistics and correlation matrix

	Mean	S.D.	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)
RAM (1)	−0.0076	1.5333
LNGAP (2)	15.0218	0.7680	−0.1305***
ROA (3)	0.0423	0.0562	−0.3526***	0.1904***
Q (4)	2.0745	1.2565	−0.2465***	−0.1225***	0.2323***
AHHI (5)	−0.3835	1.4595	−0.0215**	−0.1946***	−0.0128***	−0.1195***
EDUCATION (6)	3.4350	0.8603	−0.0722***	0.1669***	0.0069	0.0104	−0.0874***
BOARD (7)	2.1469	0.2026	0.0131	0.1712***	0.0323***	−0.1349***	−0.1282***	0.0400***
SIZE (8)	22.0962	1.1988	0.1144***	0.5524***	−0.0016	−0.4041***	−0.4306***	0.1398***	0.0971***
TANGIABLE (9)	0.2215	0.1552	−0.1610***	−0.1538***	−0.1251***	−0.0891***	−0.0660***	−0.0787***	−0.0457***	−0.0057
LEVERAGE (10)	0.4348	0.2013	0.3760***	0.1250***	−0.3434***	−0.3316***	−0.1764***	0.0334***	0.0620***	0.5022***	0.0629***
TREND (11)	7.8696	3.1775	−0.1482***	0.3476***	−0.0455***	0.0018	0.0766***	0.0515***	−0.0159*	0.1857***	−0.1757***	−0.1334***

1 Note: *, ** and *** indicate significance at 10%, 5% and 1%, respectively. (Same below)

III. Empirical results

Table 2 shows that pay differentials reduce real activities manipulation (Column (1)), supporting the internal governance view (Cheng, Lee, and Shevlin [3]). To address the endogeneity problem, we re-estimate Equation (1) by using the lagged values of regressors (Column (2)). Table 3 reports the results of the mediation analysis. Panel A shows that pay disparity has a negative and significant effect on real earnings management, which further supports the prior finding. Panel B shows that real earnings management is negative and significantly associated with firm value. The indirect and total effects are significantly positive which indicate that pay disparity contributes to greater firm value. These findings support value creation instead of destructive competition. Table 4 reports the results of a moderated mediation model. The significant positive conditional indirect effects of pay disparity on firm value for high product market competition are stronger than that for low ones. To address the endogeneity problem, we also follow Harjoto, Jo, and Kim ([4]) to re-estimate models using the lagged values of regressors. The key findings remain unchanged.[2]

Table 2. Pay disparity within TMT and real earnings management

	(1)	(2)
	RAMt	RAMt+1
LNGAPt	−0.4216***	−0.4087***
	(0.0213)	(0.0233)
EDUCATIONt	−0.1305***	−0.1271***
	(0.0137)	(0.0155)
BOARDt	−0.0159	0.0286
	(0.0616)	(0.0705)
SIZEt	0.0826***	0.1090***
	(0.0136)	(0.0158)
TANGIABLEt	−2.3257***	−2.3813***
	(0.0736)	(0.0837)
LEVERAGEt	2.8764***	2.7625***
	(0.0694)	(0.0807)
TRENDt	−0.0359***	−0.0370***
	(0.0042)	(0.0052)
Constant	4.5296***	3.6748***
	(0.2824)	(0.3284)
Adj. R2	0.2308	0.2265
N	14,313	10,900

Table 3. Results of mediation analysis

	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)
Panel A	RAMt	RAMt	RAMt	RAMt	RAMt	RAMt	RAMt	RAMt	RAMt	RAMt
LNGAPt( $α1$ )	−0.4216***	−0.4321***	−0.4289***	−0.4233***	−0.4244***	−0.4216***	−0.4321***	−0.4289***	−0.4233***	−0.4244***
	(0.0213)	(0.0241)	(0.0270)	(0.0304)	(0.0327)	(0.0213)	(0.0241)	(0.0270)	(0.0304)	(0.0327)
Panel B	ROAt	ROAt+1	ROAt+2	ROAt+3	ROAt+1~3	Qt	Qt+1	Qt+2	Qt+3	Qt+1~3
LNGAPt( $β1$ )	0.0128***	0.0123***	0.0118***	0.0111***	0.0115***	0.0945***	0.1189***	0.1088***	0.0879***	0.0933***
	(0.0007)	(0.0008)	(0.0009)	(0.0011)	(0.0008)	(0.0162)	(0.0178)	(0.0195)	(0.0216)	(0.0196)
RAMt( $β2$ )	−0.0103***	−0.0109***	−0.0094***	−0.0077***	−0.0097***	−0.1507***	−0.1452***	−0.1097***	−0.0878***	−0.1295***
	(0.0003)	(0.0004)	(0.0004)	(0.0005)	(0.0004)	(0.0081)	(0.0091)	(0.0096)	(0.0104)	(0.0098)
Control variables	YES	YES	YES	YES	YES	YES	YES	YES	YES	YES
R2(RAM)	0.2311	0.2409	0.2352	0.2298	0.2345	0.2311	0.2409	0.2352	0.2298	0.2345
R2(VALUE)	0.2912	0.2134	0.1653	0.1368	0.2749	0.2275	0.2635	0.2711	0.2633	0.3878
R2(TOTAL)	0.3777	0.3211	0.2954	0.2819	0.3405	0.3677	0.3999	0.4136	0.4070	0.4819
Indirect effect ( $α1β2$ )	0.0043***	0.0047***	0.0040***	0.0032***	0.0041***	0.0635***	0.0627***	0.0470***	0.0372***	0.0549***
Total effect ( $β1+α1β2$ )	0.0171***	0.0170***	0.0158***	0.0143***	0.0156***	0.1580***	0.1816***	0.1558***	0.1251***	0.1483***
N	14,313	10,900	8783	7051	6185	14,313	10,900	8783	7051	6185

Table 4. Results of moderated mediation model

	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)
Panel A	RAMt	RAMt	RAMt	RAMt	RAMt	RAMt	RAMt	RAMt	RAMt	RAMt
LNGAPt( $α1$ )	−0.4399***	−0.4537***	−0.4502***	−0.4470***	−0.4518***	−0.4399***	−0.4537***	−0.4502***	−0.4470***	−0.4518***
	(0.0214)	(0.0243)	(0.0273)	(0.0307)	(0.0330)	(0.0214)	(0.0243)	(0.0273)	(0.0307)	(0.0330)
LNGAPt×AHHIt( $α2$ )	−0.2319***	−0.2592***	−0.2264***	−0.2607***	−0.2826***	−0.2319***	−0.2592***	−0.2264***	−0.2607***	−0.2826***
	(0.0352)	(0.0376)	(0.0390)	(0.0437)	(0.0483)	(0.0352)	(0.0376)	(0.0390)	(0.0437)	(0.0483)
Panel B	ROAt	ROAt+1	ROAt+2	ROAt+3	ROAt+1~3	Qt	Qt+1	Qt+2	Qt+3	Qt+1~3
LNGAPt( $β1$ )	0.0128***	0.0123***	0.0118***	0.0111***	0.0115***	0.0945***	0.1189***	0.1088***	0.0879***	0.0933***
	(0.0007)	(0.0008)	(0.0009)	(0.0011)	(0.0008)	(0.0162)	(0.0178)	(0.0195)	(0.0216)	(0.0196)
RAMt( $β2$ )	−0.0103***	−0.0109***	−0.0094***	−0.0077***	−0.0097***	−0.1507***	−0.1452***	−0.1097***	−0.0878***	−0.1295***
	(0.0003)	(0.0004)	(0.0004)	(0.0005)	(0.0004)	(0.0081)	(0.0091)	(0.0096)	(0.0104)	(0.0098)
Control variables (AHHI included in Panel A)	YES	YES	YES	YES	YES	YES	YES	YES	YES	YES
R2(RAM)	0.2338	0.2441	0.2380	0.2332	0.2384	0.2338	0.2441	0.2380	0.2332	0.2384
R2(VALUE)	0.2912	0.2134	0.1653	0.1368	0.2749	0.2275	0.2635	0.2711	0.2633	0.3878
R2(TOTAL)	0.3798	0.3239	0.2980	0.2850	0.3439	0.3698	0.4024	0.4158	0.4096	0.4846
Conditional Indirect effect (Mean-SD)	0.0033***	0.0034***	0.0031***	0.0024***	0.0029***	0.0479***	0.0455***	0.0357***	0.0268***	0.0384***
Conditional Indirect effect (Mean+SD)	0.0054***	0.0060***	0.0051***	0.0042***	0.0054***	0.0793***	0.0801***	0.0589***	0.0480***	0.0725***
N	14,313	10,900	8783	7051	6185	14,313	10,900	8783	7051	6185

IV. Conclusion

This article examines whether pay disparity within TMT restricts real earnings management and how the relationship further enhances firms' value. Using data of 2610 non-financial listed firms in China for the period 2007–2018, we find that pay disparity within TMT restricts real activities manipulation and further enhances firms' value. Moreover, the indirect effect is stronger when product market competition is high. These findings highlight important implications for both policymakers and shareholders in emerging economies to encourage pay differentials within TMT.

Disclosure statement

No potential conflict of interest was reported by the authors.

Correction Statement

This article has been republished with minor changes. These changes do not impact the academic content of the article.

1 Adams, R. B., H. Almeida, and D. Ferreira. 2005. " Powerful CEOs and Their Impact on Corporate Performance." Review of Financial Studies 18 (4): 1403 – 1432. doi: 10.1093/rfs/hhi030. 2 Ali, A., and W. Zhang. 2015. " CEO Tenure and Earnings Management." Journal of Accounting and Economics 59 (1): 60 – 79. doi: 10.1016/j.jacceco.2014.11.004. 3 Cheng, Q., J. Lee, and T. Shevlin. 2016. " Internal Governance and Real Earnings Management." The Accounting Review 91 (4): 1051 – 1085. doi: 10.2308/accr-51275. 4 Harjoto, M., H. Jo, and Y. Kim. 2017. " Is Institutional Ownership Related to Corporate Social Responsibility? the Nonlinear Relation and Its Implication for Stock Return Volatility." Journal of Business Ethics 146 (1): 77 – 109. doi: 10.1007/s10551-015-2883-y. 5 Khalil, M., and A. Ozkan. 2016. " Board Independence, Audit Quality and Earnings Management: Evidence from Egypt." Journal of Emerging Market Finance 15 (1): 84 – 118. doi: 10.1177/0972652715623701. 6 Mande, V., and M. Son. 2012. " CEO Centrality and Meeting or Beating Analysts' Earnings Forecasts." Journal of Business Finance & Accounting 39 (1–2): 82 – 112. doi: 10.1111/j.1468-5957.2011.02262.x. 7 Park, K. 2017. " Pay Disparity within Top Management Teams and Earning Management." Journal of Accounting & Public Policy 36 (1): 59 – 81. doi: 10.1016/j.jaccpubpol.2016.11.002. 8 Roychowdhury, S. 2006. " Earnings Management through Real Activities Manipulation." Journal of Accounting & Economics 42 (3): 335 – 370. doi: 10.1016/j.jacceco.2006.01.002. 9 Siegel, P. A., and D. C. Hambrick. 2005. " Pay Disparity within Top Management Groups: Evidence of Harmful Effects on Performance of High-Technology Firms." Organization Science 16 (3): 259 – 274. doi: 10.1287/orsc.1050.0128. Tang, H.-W., and -C.-C. Chang. 2015. " Does Corporate Governance Affect the Relationship between Earnings Management and Firm Performance? an Endogenous Switching Regression Model." Review of Quantitative Finance and Accounting 45 (1): 33 – 58. doi: 10.1007/s11156-013-0427-z. Source: https://www2.deloitte.com/content/dam/Deloitte/cn/Documents/human-capital/deloitte-cn-hc-2019-a-share-executives-salary-report-zh-190723.pdf Tables are not presented due to word limit. Contact the author if required.

By Wei He; Xuanyi Shi; Yue Chang and Wenjun Wu

Reported by Author; Author; Author; Author