| Variable name | Variable definition |
| Dependent variable |
|
| Excessive compensation of the top-level management (EXCOMP) | The estimated excessive compensation of the top-level management is calculated according to Model (2) and (3), that is, the result is obtained by deducting the reasonable compensation from the actual total compensation |
| Independent variable |
|
| (1) Ownership structure |
|
| 1. Shareholding ratio of managers (MANAGER) | The proportion of managers’ shareholding in the total issued shares of the company |
| 2. Shareholding ratio of large shareholders (BLOCK) | The shareholding proportion of shareholders holding more than 10% shares of the company but not acting as directors and supervisors in the total issued shares of the company |
| 3. Shareholding ratio of institutional investors (INST) | The proportion of institutional investors’ shareholding in the total issued shares of the company |
| 4. Shareholding ratio of directors and supervisors (DIRECT) | The proportion of directors’ and supervisors’ shareholding in the total issued shares of the company |
| 5. Degree of ownership deviation from earnings (difference between shareholdings and earnings) (VC) | Shareholding control rights - earnings distribution rights of the company’s ultimate controlling shareholders |
| (2) Board characteristics |
|
| 1. Board size (B_SIZE) | Ln (Number of directors in the board) |
| 2. The chairperson concurrently acts as the general manager (DUAL) | It is a dummy variable. If the chairperson concurrently acts as the general manager of Company i in Year t, the value of it is 1; otherwise, it is 0 |
| 3. Proportion of independent directors (ID) | The proportion of independent directors in the board of directors |
| 4. Business degree of independent directors (BUSYDIRECT) | The average number of companies in which independent directors concurrently serve as directors |
| 5. Frequency of Compensation Committee Meetings (CCQ1) | The frequency of Compensation Committee Meetings during the year |
| 6. Average attendance rate of Compensation Committee Meetings (CCQ2) | The number of committee members attending the meeting/the total number of the members of the Compensation Committee in that year |
| Control variables |
|
| 1. Growth opportunity (GROWTH) | It is measured by Tobin’s Q. Tobin’s Q = (market value of common stocks + market value of special stocks + current liabilities + long-term liabilities) at the end of the period/the total assets at the end of the period |
| 2. Company size (SIZE) | The natural logarithm of the company’s total assets. |
| Variable name | Variable definition |
| 3. Industry (INDUSTRY) | It is a dummy variable. If it is an electronics company, the value of it is 1; otherwise, it is 0 |
| 4. Year (YEAR) | It is a dummy variable. If the sample is after 2020 (including 2020), the dummy variable of its control year is 1. If the sample is before 2020, the dummy variable of its control year is 0 |