Nghiên cứu chính sách chi trả cho nhà quản lý của các công ty cổ phần ở việt nam tt tiếng anh

1 INTRODUCTION Rationable At present, Agency cost has become a common issue and a great challenge in financial management activities with joint-stock companies around the world Apart from finding out effective compensation policy, avoiding the disagreement about benefits between managers and shareholders is also a remarkable concern of companies due to its complexity A poor compensation plan would encourage the maximization of current income without paying attention to future income More seriously, value for future shareholders would be chosen to sacrifice for the generation of high results in short term Under another point of view, conflicts between stakeholders are manifested through contradiction Income of manager entirely depends on business results; therefore, executives tend to limit their risk by rejecting highprofit but high-risk projects and focusing on moderately profitable but less risky ones On the other hand, investors tend to accept higher risks with the desire of earning remarkable returns As soon as this conflict is solved, company could create more values Current situation in Vietnam also shows that the more competitive and professionally oriented the market economy is, the more important this problem could become A large number of joint-stock companies are confused in determining the income distribution (salaries, bonuses) to the managers This issue results in negative impacts on compensation policy In particular, in the past time, there was a large number of joint-stock companies in Vietnam paid “sky-high” incomes to managers that neither reflected the values they brought back to enterprises nor based on any scientific foundation In Vietnam's context, due to some limitations in accessing to reliable sources of data, there are not many researches about this subject, especially empirical studies Therefore, the topic "Research on the comppensation policy for managers of joint stock companies in Vietnam" was selected ro research Research objectives This thesis aims to provide scientific and experimental evidence of the factors affecting the compensation of manager and the current situation of the payment policy for manager among listed companies in Vietnam during the period from 2010 to 2017 Based on the research results of the model combined with compensation policy’s situation, the author gives some solutions to improve management compensation policies in Viet Nam joint stock companies Scope and subject of research Research object: The compensation policy for manager (Board of Excutive) of joint-stock company listed on Viet Nam’s Stock Market Research scope: Times: The period from 2010 to 2017 Places: Research sample is 269 joint-stock company listed on Viet Nam’s Stock Market The case study of compensation policy is FPT Company New contributions of the thesis: - New contribution to the literature: The thesis has codified and formulated a theoretical framework for compensation policies for managers of joint stock companies, such as: (i) the role and nature of the compensation policy; (ii) The components of the compensation policy for the manager; (iii) models of compensation for the manager; (iv) Key factors effect the compensation for managers of JSC - New contribution to the emprical: The thesis has analyzed the current situation of compensation policy for managers of listed companies in the Vietnam stock market in the period 2010 - 2017 The thesis provided emprical for key factors effecting on the compensation policy for managers of listed companies on the Vietnam stock market In combination with the case study of compensation for the key manager of FPT Corporation and conducted in-depth interviews with expert From there, the conclusions were made: (i) The impact of input factors on the management compensation policy of listed companies on the Vietnam stock market from 2010 - 2017; (ii) An assessment of the successes, limitations and reasons to make an important practical basis for proposing solutions to improve the compensation policy in VietNam listed companies - New recommendation from our findings: Based on an empirical study on the compensation for manager in Vietmam joint stock companies, my thesis has suggested the following recommendations:: (i) The thesis proposes the application of advanced compensation models in the world to joint stock companies in Vietnam in setting up the payment policy system for managers such as pay-as-you-go models based on increased economic value - EVA and the ESOP payment model based on corporate value-added; (ii) Flexibly use short-term and long-term criteria to measure the performance of managers as a basis for policy development; (iii) enhancing the independence of the BOD members in controlling the payment to the executives; and (iv) enhance the role of the Board of Supervisors and Internal Auditors Structure The structure of thesis consists of four following chapters: Chương 1: Overview of literature and research methodology Chương 2: Theory and practice of the compensation policy for manager of joint stock company Chương 3: Current situation of compensation policy for managers of Viet Nam joint stock companies Chương 4: Recommendations to improve the compensation policy for managers of Viet Nam joint stock companies CHƯƠNG 1: OVERVIEW OF LITERATURE AND RESEARCH METHODOLOGY 1.1 Overview of literature 1.1.1 Studies on the relationship between the agency cost and the payment policy for managers of joint stock companies The agency cost has been mentioned quite early in various studies, but this is a big challenge for corporate governance This is the cost that arises when there is a separation of ownership and management (Jensen and Meckling, 1976) According to the agency theory given by Jensen and Meckling (1976) the principal (who provides finance) and the agent (who manages the firm) both want to maximize their utility1 and in doing so they will not act in the best interest for each other They further suggest that the shareholders (principal) can control the actions of the agent by methods like auditing, formal control systems, budget restrictions and the establishment of incentive compensation system An implication of this theory can be that it is always complicated to evaluate the actions of the agent i.e whether their actions have a positive or negative effect on the firm value That is why it would be in the interest of the shareholders to align the pay of the agent with the performance of the firm In a number of studies on the agency cost, studies dealt with the relationship between agency costs and executive compensation for joint-stock companies, including: Jensen and Meckling (1976); Lucian Arye Bebchuk & Jesse M Fried (2003); Hongxia Li and Liming Cui (2003) or in-country studies such as Ha Thi Thu Hang (2007); Nguyen Ngoc Thanh (2010); Than Thi Thu Thuy et al (2014) 1.1.2 Studies on executive compensation models Tại Việt Nam, nghiên cứu độc lập sách chi trả cho nhà quản lý doanh nghiệp nói chung CTCP niêm yết nói riêng mẻ, có nghiên cứu xem xét vấn đề Các nghiên cứu chủ yếu tập trung vào nghiên cứu mảng vấn đề riêng rẽ như: vấn đề tiền lương, tiền thưởng người lao động nói chung doanh nghiệp Trong nghiên cứu liên quan trực tiếp đến vấn đề này, kể đến số cơng trình nghiên cứu chủ yếu sau đây: Bùi Xuân Chung (2009); Nguyễn Văn Thanh (2005); Alex Edmans, Xavier Gabaix, Tomasz Sadzik, Yuliy Sannikov (2012); Hoàng Văn Hải, Nguyễn Anh Tuấn Nguyễn Phương Mai (2011); Trần Kim Dung (2014) 1.1.3 Studies on the Factors affecting Executive compensation * Effect of firm performance on executive compensation Most studies on the relationship between firm performance and executive compensation show that there is a positive relationship between firm performance and executive pay Both Usman Tariq (2010), Ntim et al (2015) and Johnson (1982) find a positive relationship between accounting-based firm performance and executive compensation Similarly, Belliveau et al (1996), Finkelstein and Boyd (1998) , Core et al (1999), Cyert et al (2002), Kato and Long (2006), Ozkan (2011), Farmer et al (2013), Schultz et al (2013) and Swatdikun (2013a) show that market-basedperformance has a positive relationship to executive remuneration In contrast, Brick et al (2005), Zhou (2000) shown that as a negative relationship between firm performance and executive compensation * Effect of corporate governance on executive compensation nAumber of studies show that executive remuneration is not only influenced by firm performance, but also by corporate governance For example, Cyert et al (2002) suggest that executive cash compensation is higher when the board of directors is represented by greater outside directors Shah et al (2009 found that CEO pay were a function of firm performance and corporate governance such as: CEOs' talents, board independence, board size, Equity and independence of the audit committee Berkema and Mejia (1998) identified important factors affecting the level of pay for CEOs; These include: (i) Market forces, (ii) Ownership structure, and Large shareholders (blockholders) And in particular, the appearance of a remuneration committees * Effect of corporate ownership on executive compensation Shleifer Vishny (1986) shown that concentrated ownership has been one of the control mechanisms of managers It follows that based on these arguments, ownership concentration negatively affects total executive compensation The results of empirical studies on the concentration of ownership revealed, overall, a negative influence of the presence of controlling shareholders on executive compensation (Haid and Yurtoglu (2006) on the German market and Mehran (1995) on the U.S market) In the Anglo-Saxon context, Lambert et al (1993) and Core et al (1999) verify that the level of executive compensation is lower when the executives’ participation in capital holding is larger Zhaoyang Gu, Kun Wang and Xing Xiao (2010) verify that there is the relationship between Government control and executive Compensation 1.1.4 Research gaps Testing the factor affecting to executive compensation in Viet Nam listed companies is an essential requirement Studies on the compensation policy for managers in Vietnam has been limited to qualitative analysis methods and descriptions of basic theoretical frameworks, thus providing emprirical evidence is needed My thesis targets to answer the following research questions: Question What is the current situation of the compensation policy for managers and the application of compensation models in Viet Nam listed companies? Question What factors impacts to the management compensation of joint stock companies are? Question What are the achievements and limitations on the compensation policy for managers in Vietnam? Question What recommendations and solutions should be implemented in Vietnam listed companies? 1.2 Research model of the thesis Research on the comppensation policy for managers of joint stock companies in Vietnam Theoretical Framework and Practice of comppensation policy Theory of manageme nt and manager of joint stock companies Theory of agency cost and The compensatio n policy for manager Experiences in building compensatio n policy for managers of joint stock companies in the world The current situation of compensation for managers in VietNam Overview of The current situation of executive compensation policy in VietNam listed company Testing the impact of factors on the compensatio n policy for managers of listed companies in Viet Nam Case study of compensati on policy for managers of FPT Corporation RECOMMENDATIONS TO COMPLETE THE COMPENSATION POLICY FOR MANAGERS OF JOINT-STOCK COMPANIES IN VIETNAM 1.3 Methods of data collecting and data processing Methods of data collecting: Primary data were collected through expert interviews Secondary data were collected from the financial statements and the annual report audited Methods of data processing: The collected data will be imported and the storage inti data files and processed with Eview software and Exel… CHƯƠNG 2: THEORY AND PRACTIVE OF THE COMPENSATION POLICY FOR MANAGER OF JOINT STOCK COMPANY 2.1 Theory of management and manager of joint stock companies 2.1.1 Overview of joint stock company A joint stock company (JSC) is a business entity in which shares of the company's stock can be bought and sold by shareholders Each shareholder owns company stock in proportion, evidenced by their shares (certificates of ownership) Joint Stock Company is divided into types: Private Stock Company; Public Stock Company; Listed Company * The internal structure system of joint stock company The General Meeting of Shareholders (AGM) is composed of all shareholders with voting rights, which is the highest decision-making body of the company The Board of Directors (or Board of Directors - Board of Directors) is elected by the owners to manage and run the company on their behalf The Executive Board is a collection of individuals who hold the highest executive positions in a joint venture, headed by an executive director (director or general director) assigned by the Board of Directors to manage and run the business The Executive Board is entrusted with the day-to-day management of the business, implementing the directions, resolutions and conclusions of the Board of Directors and the General Meeting of Shareholders 2.1.2 The defenition manager of joint stock company The manager of a joint-stock company is the person who holds the key managerial positions capable of directing the direct management of the activities of the various sections of the company following a common strategy to achieve the objectives of firm, including the members of the executive board 2.2 The compensation policy for manager 2.2.1 Theory agency cost and the role of Executive compensation in resolving conflicts of agency problem in Joint Stock Companies According to Jensen and Meckling (1976), Fama and Jensen (1983), the agency problem may exist between the owner (shareholders) and the agencies (BoD and BoE) or even among BoD and BoE This problem is clearly revealed when the independence and supervisory functions of the BoD turns out to be ineffective The solution to limit the issue between shareholders and BoD is to increase the supervisory function of the BoD on the one hand and to complete the structure of income package for the BoE on the other hand so that the benefits of both parties could be harmonized According to researches about agency costs, the basic principles that companies need to master when developing a reasonable income policy for executives include: (i) The income payment policy should have the effect of encouraging BoE to work with the utmost effort In order to so, the level of income must be proportional to the level of effort of the board; (ii) The income payment policy should encourage BoE to get balance between the short-term and long-term interests of the business - the benefits of shareholders (iii) Ensure risk management at all levels for enterprises 2.2.2 The concept and nature of the compensation policy for manager Executive compensation or executive pay policy of the joint stock company is the whole system of regulations on criteria for determining the total pay and method of payment to managers for the purpose of treating them In other words, the compensation policy for manager is the policy that the BOD provide financial and non-financial compensation for managers of the company, which describes in detail the structure of the payment components and conditions apply specifically for managers Generally, It is typically a mixture of salary, bonuses, shares of or call options on the company stock, benefits, and perquisites, ideally configured to take into account government regulations, tax law, the desires of the organization and the executive, and rewards for performance 2.2.3 The basic tools of compensation or remuneration • Salary • Short-term incentives (STIs), sometimes known as bonuses • Long-term incentive plans (LTIPs) • Employee benefits • Paid expenses (perquisites) • Insurance 2.2.4 The forms of compensation policy for manager Cash compensation is a form of payment made to managers dealing with or responsible for cash flow in pay-deskk 9 Equity compensation is a form of payment an organization can offer managers to partake in ownership of the firm It is non-cash pay that is offered to managers, including options, restricted stock and performance shares Benefits: The company can pay for the managers with the products and services or programs company uses to supplement managers’ compensation, such as paid time off, medical insurance, company car, and more… 2.3 The compensation models for manager of the jont stock company 2.3.1 Salary payment models The payroll model is based on the traditional salary scale: it is a state payroll system, or is designed according to the same principle with some basic characteristics such as attachment to seniority, degree instead of actual capacity and results An additional pay scale beyond managerial leverage is a model for calculating salaries based on criteria other than the traditional salary system This system strives to create a reasonable income gap between managerial titles and ordinary workers 3P compensation Model: 3P compensation is a combination of pay for position, Person and Performance 2.3.2 Incentive compensation models Incentive compensation model based on profit: One of the criteria for determining the level of pay for managers is profit (profit exceeds the annual plan of the business) Incentive compensation model based on the results of the increase in the value of the enterprise or stock price: The objective of the investor is to maximize the value of the firm, thus linking the manager's income with Stock price will help unify the goals of managers and investors, thus limiting repatriation costs, including: - ESOP - Employee Stock Ownership Plan - SO - Stock Option - MBO – Management Buy Out) - EVA – Economic Value Added 2.4 The factors affecting to compensation policy 2.4.1 The internal factors • Firm Performance • Firm Size • Board of Director Size 10 • Company Ownership 2.4.2 The managerial factors • Maintain managerial positions and experience of the manager • The potential of the manager • Viewpoint and vision of the manager • Performance of manager 2.4.3 The other factors • Scarcity of labor force management in the labor market • The nature of the work of the manager • The development cycle of the economy • Industry 2.5 Experiences in building compensation policy for managers of joint stock companies in the world 2.5.1 In Australia Australian listed companies are also paying close attention to the executive pay policy Remuneration for managers is increasing over time The structure of long-term bonus, bonus and stock-based incentives encourages managers to engage and engage in longer-term engagements with the company A number of studies have shown that increasing the compensation rates of Australia's 200 largest listed companies over the past 20 years has a linear relationship with the company's performance (2009) 2.5.2 In USA According to a study by the US Groom Law Firm in 2011 on the guidelines for payment regulations for managers of listed companies by the US Securities and Exchange Commission, the SEC asked The public disclosure of all information to clarify the policy of the companies to pay for the manager Some of the divisions included in the payroll policy for managers of a listed company in the United States include: Basic salary; Reward incentives with short-term focus; Long-term incentive payments; Enhanced welfare policy packages; Other benefits and conditions, such as car and club membership In addition, US-based companies also use a "hell of a hell" bonus policy for executives from rival companies to compensate for their money Valuable from the stock options of the old company 2.5.3 In China Payment policy for executives in China is different from payment policy 11 in Australia and USA but the trend is changing rapidly in recent times Based on a study by Conyon (2017), executive pay policy in China now largely consists of only two salaries and bonuses, for stock options and incentives Shares are relatively rare elements in China's senior management pay package 2.5.4 Lessons for joint stock companies in Vietnam: - Firstly, to determine the structure of components in the compensation system to ensure reasonable incentives, gradually reduce the proportion of fixed wages, increase the proportion of bonuses, long-term incentives - Secondly, limit the total annual cash compensation for managers - Thirdly, use a comprehensive assessment system with a combination of different indicators as the basis for determining the level of pay for managers, including traditional criteria such as profitability, turnover, price and modern norms such as EVA, MVA - The Fourth, establish and improve Remuneration Board CHAPTER 3: THE CURRENT SITUATION OF COMPENSATION POLICY FOR MANAGERS IN VIET NAM JOINT-STOCK COMPANIES 3.1 Overview of joint stock companies listed on Vietnam's stock market The number of listed companies is increasing, which is one of the signs that the growth of the stock market in Vietnam From the perspective of investors, the number of listed companies increased means the increase of goods and investment opportunities in the market As of the beginning of 2018, the proportion of listed companies classified by sectors on the HNX is as follows: The number of listed companies occupying the highest proportion on the HNX are companies operating in the industry with 123 listed companies, followed by the construction and services trade The number of companies listed on HNX is the lowest among companies in the agriculture, forestry and fishery sectors with only two companies 3.2 The current situation of executive compensation policy in VietNam listed company 3.2.1 Overview of The current situation of executive compensation policy in VietNam listed company 12 When considering the implementation of the policy of paying a manager of a joint stock company, the factors to be considered are the total annual payment and the structure of payments to the manager In general, the level of payment for managers of companies listed on the Vietnam stock market tends to increase over the years from 2010 to 2017, especially for companies in the two financial sectors and Agriculture and Forestry Fisheries Compensation for managers in the telecommunication and hospitality services sector is not very volatile as these are basic sectors so the performance of companies is not affected much for the period 2010 - 2016 The industry that the listed companies pay the lowest for managers is the science and technology sector and the average pay for the management team of a company over $ 1.2 billion per year, while the industry's highest payouts for managers are for companies operating in the financial and real estate industries with an average payout per company is 4.08 billion per year (financial sector) and 3.75 billion per year (real estate) The payoffs for managers of listed companies operating in different sectors also differed by sector 3.2.2 The situation of using models in the payment policy for managers of joint stock companies listed in Vietnam According to a survey of the statutory salary scheme of JSCs in Vietnam, 100% of JSCs now apply the basic salary model based on the salary scale based on the basic salary and minimum salary of the region State regulations However, each company, based on the characteristics and size of its business through the Board of Directors, will set the average base salary, adjustment factor in different salary scales The level of adjustment of the legal provisions for the policy of payment to managers in state-owned and state-owned share capital companies in Vietnam also varies considerably * The current status of applying the ESOP model in the payment policy for managers of Vietnam JSC In 2010, only three listed companies in the Vietnam stock market have applied the ESOP model in implementing the payment policy for their key managers, so far there have been about More than 30 listed companies implement a payout policy based on ESOP Applying this model has opened up a new era of competition in the senior managerial labor market These compensation programs are extremely important because it helps to motivate the managers in the corporation to strive hard for shareholders It also 13 eliminates the status of managers in the business rather than the growth of the company to enjoy the ESOP is focused on making money from the company Of course, ESOP is only the most effective when it is a long-term program and associated with the development of the company that these managers bring It would be pointless if ESOP was implemented without the close cohesion of the company's achievements with these awards 3.2.3 Case study of compensation policy for managers of FPT Corporation FPT Joint Stock Company is a typical listing on the Vietnam stock market when applying various payment policy models to incentivize key managers, including: payment policy Cash bonuses are based on the payroll scale and the ESOP bonus policy Payment policy for managers was promulgated by FPT Board of Directors and applied to attract, retain and negotiate contracts for key management personnel in the company Input criteria are used to develop a management pay plan for FPT, including the following four criteria: (i) Relevance to work performance, contribution to FPT; (2) Competition by market; (3) Encourage increased productivity and quality of work; (4) Fairness and transparency The components of the compensation policy system applied exclusively to FPT managers are classified into the following categories: Salary (monthly salary (12 months); Monthly salary (13 months) depending on the business situation of the corporation and rewarded on the occasion of the establishment of FPT 13/9 and Lunar New Year), Allowance for managers (travel, mobile phone, part time Bonus (Business Performance Bonus and Performance Bonus) and Social Welfare (Social Insurance / Medical / Unemployment Insurance, Health Check / Insurance) FPT Care, vacation mode ) In order to implement the salary and bonus policy for key managers at the corporation level and member company level, FPT assigns staffs according to each job sector and then builds a payroll system and the bonus policy model associated with each job segment in the salary scale; Regarding the cash compensation policy: Based on the business results, the annual charter will determine the percentage of profit after tax (not exceeding 0.49%) to pay bonuses managers In this pay system, the manager's cash income is divided into two categories: fixed income, earnings based on performance (bonuses) In particular, the soft wage is expected to account for 40 to 50% 14 Regarding the incentive policy by rewarding ESOP shares to the managers of FPT: The source of the bonus share-based policy is derived from the after-tax profits and the equity fund issued for the purpose of official bonus granted by FPT put on and put into use Determining the percentage of deductions to be paid to personnel with outstanding annual contributions is decided by the Board of Directors based on the business results of that year The right to buy shares at preferential prices is reserved for managers who have years of continuous working experience The total volume issued under this Program is not more than 0.5% of charter capital at the time of issue and the annual percentage rate is based on annual profit growth Time and the list of managers of FPT were implemented by the Board of Directors The plan was developed and decided based on the performance of each manager (KPIs) and the achievement of the objectives of the plan annual profit Thus, FPT also has a policy of paying special treatment to managers, which is associated with strong incentive incentives Current payment policy of FPT is transparent to every staff member and is developed for all managers and leaders of the company: 100% of staff know His annual income plan from the beginning of the year This is to create motivation, direct encouragement to each individual However, the payment policy has some disadvantages such as: The share issue rate for ESOP program applied to managers is low and the issue price is not attractive in the context of market stock market is still quiet; The form of cash reward is deducted from profit after tax is quite simple and also depends much on the payroll; Reward structure, though, has increased the proportion of bonuses but still focuses on short-term bonuses in cash There are no long-term bonuses that combine the benefits of long-term management with the company 3.3 Testing the impact of factors on the compensation policy for managers of joint stock companies listed in Vietnam 3.3.1 Hypothesis and research model * Dependent variable: Total manager/executives compensation – TCOM * Independent variable - Measurement of impact factors and research hypothesis - Firm Performanc: ROE (Return on Equity) Hypothesis H1: ROE is positively related to the compensation of manager - Board size: Board size is measured by the number of board members in the board 15 Hypothesis H2: A large board of directors implies greater compensation given to the Excutives - Firm size = Ln(TotalAsset) Hypothesis H3: Bigger companies pay manager more - Non-executive Directors: Hypothesis H4: The high proportion of non-executive directors is negatively related compensation of managers - Manager ownership: Hypothesis H5: Manager ownership has a positive relationship with compensation of managers - Chair ownership: Hypothesis H6: Chair ownership is inversely related to the compensation of managers - Foreign ownership: Hypothesis H7: Foreign ownership affects the total level of pay for managers - Government ownership: Hypothesis H8: Highly state-owned companies will have a positive impact on the total level of management pay - Growth: measured by the difference between the market value and the book value of the company Hypothesis H9: High growth companies will have a positive impact on the total level of management pay - Industry: Hypothesis H10: Industry affect the policy of paying to managers of JSC Research model: TCOMit = α + β1ROEit + β2BSIZEit + β3FSIZEit + β4NEDSit + β5CEO_OWNit + β6CHAIR_OWNit + β7FR_OWNit + β8GOV_OWNit + β9GROWTH + β10INDUST + εit 3.3.2 The results of testing data After studying the relevant theoretical basics, proceeding to build the research model, then studying the implementation of necessary tests and model regression with the appropriate method * Descriptive Statistics * Dependent variable: Total manager/executives compensation – TCOM The average value of total pay for key executives of the listed companies 16 on HOSE and HNX is about 2854,851 million dong and the variation between the companies in the sample was rather large Vinamik JSC is the highest paying company with the total amount of over 90786 million VND in 2017 while the lowest paid company is Binh Thuan Mineral Industry JSC VND 72 million in 2017 However, for the TCOM variable (natural logarithm of COM) varied from the minimum value of 18.1% to the maximum value of 25.2%, with an average of 21.3%, the distribution of the variable This is the standard deviation (Kurtosis equals 4.19 and skewness is 0.28) and positively influences the research process * Independent variable - Return on equity (ROE): The average ROE of companies in the period 2010 to 2016 is approximately 10.9% Ca Mau Seafood Joint Stock Company has the lowest ROE of 367% in FY2013 due to negative profit of VND126 billion The company with the largest ROE in 2016 is South Gas Joint Stock Company with the ratio of 78.3% The difference between the average and the actual ROE of companies is quite large with a standard deviation of 18.9% This reflects the efficiency of using equity of listed companies with a large difference, some companies operating losses, negative profit leads to negative ROE, according to the survey results of companies in Research sample, the proportion of companies with the highest ROE in years in 2015, 2016, 2017 all accounted for 5.95% - Firm Size (FSIZE): The results of the statistical analysis show that the natural logarithmic value of the total assets of the JSCs in the sample is approximately 27.12 Over the period of years, from 2010 to 2016, the total assets of listed companies on the Vietnam stock market reached the highest level of 180,450,850 million, this is the total asset size of Vingroup Group Corporation in 2016 The smallest asset size is 3017.8 million, this is the size of Nam Viet Seafood Joint Stock Company The deviation between the average value and the total asset value of the group of companies is very high with high standard deviations, due to differences in business lines, financial capacity - Board Size (BSIZE) and Non-executive Directors (NEDs): The average size of the board in the sample was 5.49 with a maximum of 11 persons and a minimum of 3, which is in line with current regulations on the number of board members At the same time, the average number of non-executive directors is 59% of the board of listed companies 17 - Company ownership: The shareholding ratio of the shareholders is 7.97% for the CEO, 14.4% for the Chairman, 8% for the CEO owned by foreign investors and 25.1% owned by the state The company with the largest shareholding of the state is Dien Quang Lamp Joint Stock Company (87.4%) in 2014 However, the proportion of state ownership is uneven among companies in the sample and unstable Between the years in the study period, the volatility was stronger than the ownership of the remaining groups represented by the highest standard deviation (24.56%) This is followed by the ownership of the director and the chairman of the board of directors, which attains the highest value of 85.39% in 2013 of Rang Dong Plastic JSC when the company's CEO also holds the chairmanship Board of Directors The lowest is the ownership ratio of foreign investors with the highest foreign ownership ratio of 80% in 2015 and 2016 of Taya Vietnam Electric Wire and Cable JSC possesses the least fluctuation with a standard deviation of 12.4% * Correlation matrix The results of the analysis of the correlation coefficient between the explanatory variables show that there are no pairs of variables with rij> 0.8 correlation coefficient, while most linear relationships between the explanatory variables are just below 0.3 Thus, it can be said that there is no strong autocorrelation between the explanatory variables in the model, so the probability of occurring multi-collinearity is very low or not so does not affect the accuracy of the estimates, support for the study could use these variables to analyze the linear regression model * Heteroskedasticity Test and Serial Correlation LM Test The first step of the study was to run the Pool OLS regression model and then perform the two defect tests of the model: the variance of the variance (by the Heteroskedasticity Test: White) and the self-correlation for the Prob Index Chi-Square is less than 5% This shows that the OLS regression model has the variance of the change error and the autocorrelation of the error Thus, the leastsquaresized Pool OLS model is not suitable for explaining the regression results due to the existence of variance phenomena of change error and self-correlation of the error number Therefore, the study will continue to regression with the FEM and REM models, and to select one of these models to estimate the regression model that measures the effect of variable factors on the variables Dependent of companies listed on the Vietnam stock market, Hausman's thesis (1978) The results of Hausman's (1978) test showed that Chi-Sq (10) = 18 100.232058 statistically significant at Prob level = 0.0000