Article

China Accounting and Finance Review

, 15:2

First online:

Open Access This content is freely available online to anyone, anywhere at any time.

风险投资、产权性质与上市公司高管薪酬合约1

  • Shuang XueAffiliated withSchool of Accountancy, Institute of Accounting and Finance, Shanghai University of Finance and Economics Email author 
  • , Fengshou TangAffiliated withSchool of Accountancy,, Shanghai University of Finance and Economics

Venture Capital, Property Rights, and Managerial Compensation Contracts1

Abstract

This paper investigates the impact of venture capital on managers’ compensation contracts. The results show that pay-performance sensitivity (PPS) is higher in venture-capital-backed companies than in non-venture-capital-backed companies. A higher PPS may bring managers of venture-capital-backed companies a higher extra emolument compared with that offered by other companies in the same industry. A further test shows that the positive effect of venture capital on PPS and extra emolument exists in (1) private enterprises rather than state-owned enterprises (SOEs) and (2) in firms backed by highly reputable venture capitalists (VCs) rather than in firms backed by VCs with a low reputation. The findings indicate that even after initial public offerings (IPOs), venture capital still has a positive impact on corporate governance and affects managerial compensation contracts.

Keywords

Venture Capital Pay-Performance Sensitivity Extra Emolument Compensation Contract