Abstract:
Purpose/Significance In recent years, a special phenomenon of executive compensation has attracted the attention of scholars at home and abroad, that is, the overall performance of the industry is facing some uncontrollable and exogenous impact factors, such as changes in raw materials and product prices, which is called "luck". The "pay for luck" is the extra reward that executives get from lucky performance. Design/Methodology The sample of this paper is A-share listed companies in Shanghai and Shenzhen from 2012 to 2018. The company's overall performance is divided into two parts: the performance generated by luck and the performance generated by the talents (or efforts) of managers. Based on these, we test the impact of bargaining power and environmental uncertainty on pay for luck. Findings/Conclusion The results show that the compensation of executives with strong bargaining power is more sensitive to lucky performance, while the environmental uncertainty reduces the sensitivity of the compensation of executives to lucky performance. That is, when the environmental uncertainty is higher, a higher bargaining power does not bring higher lucky compensation. This paper expands the research on the correlation between environmental uncertainty and executive compensation, and provides inspiration for companies to design compensation schemes according to the bargaining power of executives in the uncertain environment.