The Relationship Between The Characteristics Of Shareholders And The Perks Of Manager

Top level managers, being the most important decision makers of firms, play a heavy role in the creation of wealth for shareholders.However, due to wide spread agency cost problem, the interests of the top managers and the shareholder are not necessarily well aligned. Therefore, it is important to use all sorts of means to motivate the top managers to reduce the agency cost problem, and work hard for the interest of the shareholder. There are many means that firms can reward their senior management personnel, besides salaries, bonuses stocks and options. And on-the-job consumption is one of the most widely used forms of non-monetary compensations. Compared with other compensation mode, perks have two major characteristics. First of all, perks are not paid out to top managers in the form of cash. However, perks can still increase the benefits of being in the top management hierarchy, such as better office conditions, comfortable travel opportunities, and so on, and therefore can motivate managers to work hard. Second, on-the-job consumption is often not based on written contracts, therefore has high monitoring cost. Further, the information cost of monitoring perk consumptions is usually very high. Under these circumstances, the consumptions of perks can be abused and agency cost increases. In short, perks are a means of motivating managers to work hard for the interest of the shareholders while at the same time they are associated with a high level of agency cost.Consumption as managerial compensation components, due to its special properties--hidden nature, difficult to measure accurately, initial empirical studies are mostly confined to the theoretical level of the relatively limited. With the corporate governance research is gradually developing, the consumptions of perks are becoming the hot issue of the academic community. In last few years, social all circles pay widespread attention to the" high price chandelier" and "price of wine" So far, the relevant empirical study of perks mostly based on corporate governance theory, it analysis the relationship between management personnel salary, managerial power, compensation regulation, dividend policy, corporate performance and the perks of managers. And the analysis about the relationship between company characteristics of shareholders and on-the-job consumption can be seen in the above contents, or is separately listed on equity feature a certain aspect, such as the ownership nature, holding proportion of large shareholders, debt financing, equity balance and on-the-job consumption relationship manager.Perquisite consumption is double-edged sword. On the one hand, over-the-job consumption makes the increase of agency costs, and has management of the crisis.It is possible to use of company resources for their own consumption, such as vacation travel、additional allowance and so on. On the other hand, when the job consumption due to the system of government, media monitoring and other reasons, the appropriate in-service consumer can motivate manager to work hard to create shareholder wealth, is likely to enhance corporate value. Therefore, a comprehensive view of management in-service consumer issues in the development of relevant laws and regulations should be an accurate grasp of the characteristics of its double-edged sword.On the basis of the study in this field, we use the data of the Chinese A-share listed companies in Shenzhen from2009-2010and take empirical research on the relationship between the ownership structure and the perks of managers. This paper analyzes the governance effect of share ratio in circulation, share ratio of state shareholder on managerial over-investment. The results show that the largest shareholder can constrict the amount of perquisite consumption of managers. The more balance of stock ownership, the larger perquisite consumption. And compared to other companies, companies with more management shareholders incur more cost of perks for management incentive. Moreover, it is found that the separation degree do not have distinctive effect on the perquisite consumption of managers.This article is divided into six chapter, the contents of each chapter are as follows:Chapter1is the introduction. It mainly introduces the background and significance of this research, and then presents ideas and frameworks, research methods and features of this article.Chapter2is the literature review and theoretical analysis. This part firstly introduces domestic and foreign research results. And then defines some basic concepts in this article, elaborates on principal-agent theory.Chapter3is the research hypothesis. On the basis of above study, we put forward the hypothesis of this article.Chapter4is research design. This paper uses the data of the Chinese A-share listed companies in Shenzhen from2009-2010. Subsequently, according to the hypothesis, this paper constructs regression models, and variables are defined.Chapter5is empirical results and analysis. It mainly makes descriptive statistics on full sample and makes multiple regression analysis. And then, in order to ensure the reliability of conclusions of the study, the paper made a robust test.Chapter6is research findings and inspiration.Innovations and scholarly contribution of the paper is mainly reflected in the following areas:This study is the first time to systematically research on the characteristics of shareholders and in-service consumer link, focus on the relationship between the ownership structure and the perks of managers, which complement the existing gaps in the documentary. The empirical research on-the-job consumption of the domestic and foreign mostly focuses on the corporate governance perspective, focusing on executive compensation, equity structure, managerial power. While the analysis about the relationship between company characteristics of shareholders and on-the-job consumption can only be seen in the above contents, it is lack of systematic, concentrated.The second point is to expand the research-service consumer perspective. This paper analyzes the governance effect of share ratio in circulation, share ratio of state shareholder on managerial over-investment. Moreover, this paper is based on the different nature of our enterprises to distinguish between different ownership, the management features and service consumption, the impact of better governance in our country to provide reference service consumption.