Institutional Investors On The Influence Of Executive Compensation Mechanism

Early in the 20th century, 30 years, the U.S. economist Berle and Means in the "modern companies and private property" has been made in modern corporate governance problem is from the company's separation of ownership and control, this separation allows the company Managers may be given up for their own interests the interests of the shareholders or, worse, the company's long-term interest expense, of which there will be inevitable that the owner of the company's shareholders and the company's control of daily operations between the management The conflict, which agent to problems. Over the next few decades, how to solve the principal-agent problem of corporate governance brought into domestic and international theorists and practitioners of the hot issues of concern.With the emergence of institutional investors, we see the hope of solving the problem of corporate governance. Institutional investors themselves have great advantages, such as a strong capital base, with a professional operation and management of funds, the investment behavior in the stock market and other more rational and reasonable, institutional investors in the economic and social development and growth not only in the Effectively improve the capital market structure, and can participate in corporate governance, better improve the governance structure of listed companies.Institutional investors to participate in the design of executive compensation mechanism and improvement of its governance of listed companies involved in an important way. The listed company, shareholders must pay to establish a scientific and reasonable mechanism to be sufficient incentives to management, so as to enable managers to have a stronger incentive to maintain the interests of shareholders so as to better improve the company's internal governance structure, more Shareholders and managers to effectively address the agency problem between. Therefore, this paper chose this research, from our current economic and social reality, from a combination of theoretical and empirical analysis of institutional investors in terms of mechanisms for the impact of executive pay.