| As the separation of the ownership and management right of the modern enterprises,the compensation contract can effectively alleviate the principal-agent problems between the owners and the executives.Taking advantages of their own power and influences,executives can take excess compensation,which not only damages the development of enterprises,but also increases the gap between the rich and the poor in the society(Bebchuk and Fried,2003).The fifth plenary session of the 16th CPC Central Committee Meeting has emphasized "Pay more attention to social justice and allow all people to share the fruits of reform and development".However,since 2003,the Gini coefficient of Chinese residents' income has passed the alarmed line between the rich and the poor.Under the strict constraint of related remuneration policies,the total salary of state-owned enterprises executives will be limited.The "The Chinese Corporate Governance Index Report No.15(2016)" shows that the average of executive pay index of private listed companies is far higher than that of state-owned listed companies.In order to avoid the public relations dilemma caused by excess remuneration,executives will justify their excess compensation(Faulkender and Yang,2010).In the environment of asymmetric information,improving operative performances has become an important way of defense for executives to obtain excess compensation,which provides an excuse for its continuous intake of excess compensation.Enterprise groups have formed the dominated content of many countries' economic(Khanna and Yafeh,2007).Pyramidal shareholding structure(hereinafter referred to as"pyramid structure")is the main organization form of enterprise groups(La Porta et al.,1999).The structure layers of pyramid structure ultimately determines the member shape of enterprise group structure,and has become the member perspective to reveal the impacts of pyramid structure on enterprise behavior and its consequences.Private enterprises have become an important part of the national economy,but its debt financing and equity financing are subject to more institutional discrimination,the extension of the layers of pyramid structure,to obtain active internal capital market,has become an important way to ease the financing difficulties of private enterprises(Li Zengquan et al.,2008).However,The extension of pyramid structure layer will not only exacerbate principal-agent problems the between the ultimate owner and its member enterprise executives,but also affect the internal capital market of the enterprise group,therefore,affect compensation contract of member enterprise executives.According to the existing studies on the pyramid structure,excess compensation,compensation justification and compensation committee,this paper solves the above problems:Firstly,with the extension of the pyramid structure,the principal-agent problems of private enterprise group must be more complex,and its internal capital market is more active.So does this induce member enterprise executives to gain more excess compensation?Secondly,what's more,do member enterprise executives justify their excess compensation with their business performance by the the extension of the layers and what are the paths?Thirdly,under this situation,can compensation committee restrain the above effects of the extension of the layers?The chapters are as follows:the first chapter is the introduction of the design,which includes the background and main problems,the related concepts,the research significance and objectives,the research ideas and content,the technical route and research methods and the innovation;the second chapter is the literature review,we focus in the facts of excess compensation and compensation justification,the impacts of pyramid structure and compensation committee on the enterprise executive compensation to review the existing research;the third chapter induces the member theory part,which contains the principal-agent theory,the internal capital market theory;the fourth chapter is the theoretical analysis,which analyzes the principal-agent problems and the internal capital market induced by layers of pyramid structure of private enterprises prolonged,and then further analyses the impacts about the influences of pyramid structure and compensation committee to enterprise executive compensation;the fifth chapter,the sixth chapter and the seventh chapter are the empirical parts,which are the content design of empirical research,the three chapter is the empirical research not only examines the influences of layers of structure to the excess compensation and compensation justification,but also excludes the impacts of other theories to the above influences,and further discover whether the compensation committee can inhibit the above effects of pyramid structure;the eighth chapter includes the research conclusion,the contribution of research,the policy recommendations,the deficiencies and implications of the research.Conclusion 1:the extension of layers of the pyramid structure of private enterprises has significantly increased the excess compensation of the member enterprise executives in the private enterprise groups.In the stage of economic transformation,China's private enterprises enhance layers of pyramid structure has become an important way to ease financing constraints.However,the extension of layers aggravates the principal-agent problems of enterprise groups,which not only exacerbates the power of member enterprise executives,but also damages the information environment of the enterprise groups.So,the member enterprise executives can gain more excess compensation under extension of layers.Conclusion 2:the extension of the layer of the pyramid structure in private enterprise group has significantly increased compensation justification as "Justifiable Results".The reason why member enterprise executives are able to continue gaining excess compensation is that they can provide justifying excuses for their excess compensation.They also provide an excuse for overtaking of excess compensation with the aid of a"Justifiable Results".With the extension of pyramid structure in private enterprises,they can choose more subtle real earnings management,whitewash performance,and also gain active internal capital market,to construct the related transactions to reduce operating difficulties;so as to realize the implementation of "Justifiable Results" justifying behavior.Conclusion 3:the independence of the compensation committee can significantly inhibit the above effects of private enterprises in pyramid,but the overlap between the compensation committee and the audit committee significantly exacerbates the above effects of pyramid structural.Relative to the internal directors,independent directors are independent social celebrities,and consider their personal reputation,they have stronger motivation to control executives,that's why they can induce a negative moderating effect on the above influences of pyramid structure.However,the overlap of the compensation committee and the audit committee can help the member enterprise executives capture directors,thus has the positive moderating effect on the above influences of pyramid structure layer in private enterprise groups.The possible innovation of this thesis is as the following three aspects:Firstly,different from the existed study of the excess compensation and compensation justification which take the enterprise as an independent organization,this paper expands the theoretical research of excess compensation and compensation justification from the perspective of private enterprise groups.In the general existence of the pyramid structure group of private enterprises,the ultimate owner owns a great influences on the compensation contract of the member enterprise executives.The extension of the layers not only promotes the activity of the internal capital market,but also aggravates the principal-agent problems of the enterprise groups.This paper from the perspective of private enterprise groups,broadens the existed study.What's more,as the layers extended,this paper excludes the impacts on the ultimate owner and member enterprise executives'"Collusion" and enterprise "Socialism" to the excess compensation,and explores the ways to compensation justification.Second,deepen the research on the impacts of the structural layer of pyramid on the economic behavior of enterprises on the perspective of executive compensation.Different from the expropriation of internal capital market and government decentralization,research perspective,existing researches have paid attention to the influences of the pyramid structure to the executive compensation,and obtain evidence of "Effective Contracts",this paper is from the perspective of excess compensation and compensation justification,further explore the influences of layers of private enterprises to the executive compensation.On this basis,this paper explores the way to realize the compensation justification,to further deepen the related research.Third,put the research background in the private enterprise group,to discuss the influences of the independence of the compensation committee and its overlapping with the audit committee on the above impacts of pyramid structure.The regulation of listed companies promulgated by the CSRC in 2002 indicates that the compensation committee aims at developing and executing executive compensation contracts,but lacks specific provisions for its independence and structure.Therefore,the characteristics of the compensation committee independence and its overlap with the audit committee have attracted the attention of relevant scholars.This paper extends the research scenario to the private enterprise groups,and discusses the above two characteristics' influences of the above impacts of pyramid structure,which deepens the related theoretical research of the compensation committee. |
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