Serving the people: Board’s communist ideology imprinting and CEO compensation

This study examines how communist ideology imprinting on board members influences CEO compensation. We contend that strong communist imprinting acquired during their formative years will induce board members to offer low CEO salaries because traditional communist ideology advocates both individual s...

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Bibliographic Details
Published in:Journal of business research 2025-02, Vol.189, p.115169, Article 115169
Main Authors: Xin Liu, Ethan, Weng, David H.
Format: Article
Language:English
Subjects:
Board of directors
CEO compensation
Communist ideology
Imprinting
Political ideology
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Summary:This study examines how communist ideology imprinting on board members influences CEO compensation. We contend that strong communist imprinting acquired during their formative years will induce board members to offer low CEO salaries because traditional communist ideology advocates both individual service to the public and amelioration of income equality in society. We also propose that this effect is lessened in economically developed regions but more pronounced in concentrated industries. Analyzing a sample of Chinese public firms, we find support for our arguments. Our findings suggest that communist ideology still prevails in today’s China, and that this prevalence can influence board-CEO interactions.
ISSN:0148-2963
DOI:10.1016/j.jbusres.2024.115169