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Quang Thong TRUONG School of Banking University of Economics Ho Chi Minh City Vietnam E-mail: truongquangthong@ueh.edu.vn |
Linh TT NGUYEN School of Banking University of Economics Ho Chi Minh City Department of Banking and Finance, Monash Business School, Monash University, Australia Vietnam E-mail: Linh.Nguyen@ueh.edu.vn && Linh.Nguyen@monash.edu |
Minh Lam TRAN School of Banking University of Economics Ho Chi Minh City Vietnam E-mail: minhlammail@gmail.com |
The study was conducted to determine which factors represent managerial power according to managerial power theory, making compensation less sensitive than performance. The paper was conducted on 225 listed companies on the Vietnamese stock market with 1350 observations for 6 years from 2012-2017. By GMM method to deal with endogenous problems, research results show that executives can more easily use power, and make interaction between compensation and firm performance weaker with the manager has a share ownership ratio of more than 5% or a centralized ownership of less than 15% or in companies with a State ownership of more than 50%. In addition, firm performance has the opposite effect with stronger compensation for performance with the manager has a share ownership ratio under 5% or company with no more than 15% concentration ownership or the company does not have a centralized State or family-owned businesses.
Keywords: executive compensation, managerial power theory, firm performance
