Chief Audit Executive as Supervisory Board Member and Executive Compensation Contracts
研究中国上市公司中首席审计执行官兼任监事会成员对高管薪酬业绩敏感性的影响，发现这种双重角色能提升薪酬契约效率，尤其在非国有企业和监管环境严格时更显著。
This paper studies a unique phenomenon in China's corporate governance—that chief audit executives (CAEs) sit on supervisory boards (CAE duality)—and examines its effects on executive compensation contracts. Using a sample of listed firms between 2010 and 2018, we find a significant positive relation between CAE duality and pay‐for‐performance sensitivity, which suggests that the dual position helps integrate monitoring resources and reduces agency costs. This positive relation is more pronounced when companies face a stricter monitoring environment and in non‐state‐owned enterprises (non‐SOEs) than in SOEs. In addition, we find that the recent reforms on compensation strengthen the role of CAE duality in SOEs. Further analysis identifies the reliability of performance information (i.e., earnings quality) and reduced executive self‐interested behaviours (i.e., perquisite consumption) as the influencing mechanisms that increase the demand for performance‐based compensation and thus improve pay‐for‐performance sensitivity.