Abstract In this paper, we empirically analyze the effects that the geographical relationships between chairman and CEO have on the latter’s compensation contracts, based on samples of listed A-share private firms from 2005 to 2014. We find that geographical relationships are related to lower pay–performance sensitivity, and that the correlation mainly exists in poor performance periods, suggesting that geographical relationships weaken the effectiveness of compensation contracts. We also find that geographical relationships can be substituted by external formal institutions.

中文翻译：

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地理关系和首席执行官薪酬合同

摘要本文以2005年至2014年A股上市私人公司为样本，对董事长与首席执行官之间的地域关系对后者的薪酬合同的影响进行了实证分析。 –绩效敏感性，并且这种相关性主要存在于绩效较差的时期，这表明地理关系削弱了补偿合同的有效性。我们还发现，地理关系可以由外部正式机构代替。