Correlation Analysis Of Top-management Pay And Corporate Performance

This paper adopts the 2007-2009 data from Listed Companies in Sic huan, to study the correlation between top-management pay and corporate p erformance and in order to consider the effectiveness of pay and incentive mechanisms. On this basis, and then study the existence of the stickiness of top-management pay behavior in the Listed Companies in Sichuan, and ana lyzes the factors which may cause the stickiness behavior. We found that th e company controlled by the state will lead to lower top-management pay, but also reduces the sensitivity of performance- pay. With the failure of pay and incentive mechanisms, they tend to develop a wide range of pay syste m, includes post consumption. As a mechanism for executive compensation self-motivation, post consumption cost high, and the company has been offs et by the performance incentives of executives brought up the performance.post consumption choice, not only reduces the incentive executive comp ensation, but also increased the probability of the occurrence of moral hazar d.The results show that a significant correlation between executive pay a nd company performance. The stickiness of top-management pay behavior d oes exist, that is, the marginal rate of change of executive pay with corpora te performance changes in different directions, there are characteristics of as ymmetric. This may be because the governance of listed companies is not h igh, and also improve the governance environment. These factors include:The nature of the controlling shareholder of listed companies. the natur e of Controlling shareholders of listed companies can affect the investment decision-making by executives, thereby affecting corporate performance, whic h are derived from the lack of executive compensation incentive.The conflict of Control rights between large shareholders and executives. When a company majority owned by large shareholders, it will encoura ge large shareholders to monitor executives to promote the efficient operatio n of the company, but also too much interference from the shareholders wil 1 affect the business aspects. Then the executive will value the accuracy of company policy, in order to get higher pay, the conflict will appear when t he views of major shareholders and executives are not unified. The conflict of Control rights will reduce the enthusiasm of senior management, corpora te performance, and the correlation between executive pay and corporate per formance. Especially when the performance decline, executives can attribute to the excessive interference of large shareholders but not their operating ab ility, and enhance the stickiness of the pay.Salary Regulation. When the decline in corporate performance, the exec utives can attribute to policy-related losses, will further increase the stickine ss of executive pay.Redundant staff. With the decline of corporate performance, the compan y executives always attribute to the staff redundant, but not their own mism anagement, which increased the probability of the occurrence of moral hazar d, also lead to the stickiness of the top-management pay. we found a highe r proportion of independent directors will reduce the sickliness behavior.