Executive perks: Compensation and corporate performance in China

Pattarin Adithipyangkul, Ilan Alon, Tianyu Zhang

Research output: Contribution to journalArticlepeer-review

81 Scopus citations


Many studies have examined CEO compensation in developed countries, where a long tradition of disclosure renders data readily available. In emerging economies, particularly in China, where market-based compensation is a relatively new phenomenon, there are few studies of CEO compensation. In addition, information on the use of non-cash compensation is almost absent. Building on the general literature on CEO compensation, and Chinese economic and management studies, this article singularly contributes to the extant literature by (1) examining the motivational determinants of CEO perk compensation, on the one hand, and (2) exploring the relative contribution of perks to performance. We anticipate that perks can serve two roles in China: (1) to provide incentives to deter managerial shirking, and (2) to facilitate work and improve production. We find that perks are positively associated with current and future returns on assets, supporting the view that some types of perks may improve firm profitability and/or that perks are paid as a bonus to reward performance. Our findings from stratified samples suggest that perks may incentivize managers, even after controlling for firm fundamentals, such as firm size, growth opportunity, and leverage.

Original languageEnglish
Pages (from-to)401-425
Number of pages25
JournalAsia Pacific Journal of Management
Issue number2
StatePublished - Jun 2011
Externally publishedYes


  • Executive compensation
  • Firm performance
  • Non-cash compensation
  • Perks
  • Perquisites


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