The Empirical Analysis of CEO's Lucky Compensation and Corporate Governance in China

Based on the sample data of listed companies in China from 2005 to 2009, this paper finds that there is significant phenomenon of the lucky compensation for the executive pay of listed companies in our country. The further partition test of this paper indicates that the favorable corporate governance structure can relieve the lucky compensation to a certain extent. The expansion of the board size and the enhancement of the board independence are helpful to reduce the lucky compensation, which in a certain degree explains the effectiveness of independent board system. And, compared with the companies with high share-holding proportion of large shareholders, the phenomenon of the lucky compensation appears more serious in the companies with relatively low share-holding proportion.