The Study Of The Relationship Among Managerial Power, Perk And Executive Compensation

It is substantial that a company establishes a set of payment and contract mechanism which is incentive and restrained. Consequently, the problem of executive compensation will become a major concern. Simultaneously, although the payment for top management is increasing, the relativity with the efficiency of company is declining. This phenomenon is not in accord with the'optimal contract theory'based on agent cost, which result in the theory of'management power'. Based on China's special background, this dissertation is to study the issue of the executive compensation and the influence of different top managerial power on the relationship of payment and perk under the top management domination.After studying samples of 1302 listed companies from 2002 to 2009 in China, the result shows that the top managerial power related to the executive compensation and there is a self-determined motivation on the payment under the power of top management. It also shows that it is a positive correlation between executive compensation and perk. The sensitivity of executive compensation and perk will be varied under different control from top management. The bigger power of top management in enterprises, the more increase of executive compensation led by perk increase.Among listed companies in our country, there exist phenomenons of self-determined compensation which makes the executive compensation is not a means to solve agent cost but add as part of the cost. Therefore, when it's time to modify governance and improve compensation, the top managerial power should be concerned. Moreover, it is necessary to perfect the mechanisms of supervision and enhance the transparency of disclosing information to the top management payment.