Career Concerns and “Unpaid” Executives
罗炜，现为北京大学光华管理学院会计系副教授、副系主任、博士生导师。2005年获得美国匹兹堡大学(University of Pittsburgh)会计学博士学位。研究专长为公司治理、风险投资、盈余管理、会计信息与公司激励计划。研究成果发表在《经济研究》、《管理世界》、《中国会计评论》、《会计研究》、Journal of Business Finance & Accounting、Journal of Corporate Finance等学术期刊。主持过两项国家自然科学基金项目：“高管政治升迁、盈余管理与公司业绩”和“风险投资退出研究：基于会计信息质量与政治关联的双重视角”。
A significant portion of CEOs in publicly-listed Chinese state-owned enterprises receive zero pay from the companies for which they work. Instead, they are paid directly by their controlling shareholder who can be the Chinese government or parent firms controlled by the Chinese government. While their actual pay is unobservable, it is known to be low and contain few performance-based incentives. We explore how these parent-paid executives are motivated and whether the outcomes of this unusual incentive differ from conventional compensation. Consistent with career concerns as their main incentive, we find that these CEOs have a significantly higher probability of future promotion than other CEOs. We also conduct an event study using the Split Share Structure Reform in 2005. The reform liberalized the Chinese stock market and enhanced the role of the market mechanisms that potentially replaced promotion incentives in executive compensation contracts. Our evidence is generally consistent with a reduction in the strength of promotion incentives following the reform. Further analyses indicate that, compared to peers that directly pay their CEOs, firms with parent-paid CEOs have higher return on assets and asset growth, and they experience less tunneling by their shareholders.