and Peer_roe, which are the average values of the peer groups (M1 refers to Peer_ret1 and Peer_roe1; M2
refers to Reer_ret2 and Peer_roe2). Lncp is the natural logarithm of the total cash compensation of the top
three managers. Age is the number of years the company has been listed. Lev is the company’s leverage. Size
is the size of the company, the natural logarithm of total assets at the end of the year. Growth is the income
growth rate. Sh is the shareholding ratio of the largest shareholder. Mshare is the shareholding ratio of managers.
Rinde is the ratio of independent directors to the total number of directors. Dual is a dummy variable
that equals 1 if the same person holds the positions of CEO and Chairman of the Board, and 0 otherwise. Pri
is a dummy variable for the proprietary nature of the enterprise; it equals 1 if the company is a non-SOE, and
0 otherwise. Year are dummy variables for every year. Industry are industry dummy variables set by the
CSRC.