Compensation Regulation In State-Owned Enterprises, Media’s Supervisory Role And Non-Pecuniary Compensation Voluntary Disclosure

Non-pecuniary compensation of China’s state-owned enterprises executives had been a problem for a long time. Small part of it may be known to the public at the same time the state-owned enterprises executives also took a lot of money to high-paying. Especially a few years ago, huge salaries of the financial industry executives has aroused widespread concern in society. In this context, our government promulgated the compensation regulation policy as an effective means to control the problem.However, the compensation regulation policy may be difficult to solve the problem because of non-pecuniary compensation. The topic non-pecuniary compensation is sensitive in China, and it attracts the interest of many scholars. There is no lack of Chinese scholars to study the relevant aspects of the non-pecuniary. Some scholars’study found that the existence of compensation regulation will lead to non-pecuniary compensation as the means of state-owned enterprise managers to make up for cash compensation loss.Since the compensation regulation will lead to more state-owned enterprise executives’non-pecuniary compensation, will the executives in state-owned enterprise maintain the same level of non-pecuniary compensation voluntary disclosure as before? Studies have shown that compensation regulation is more intense, managers are more likely to pursue over non-pecuniary compensation to achieve self-compensation, also more likely to reduce the voluntary level of non-pecuniary compensation disclosure.Further, since the compensation regulation will reduce the managers of state-owned enterprises’non-pecuniary compensation voluntary disclosure level, causing the increase of agency costs of state-owned enterprises. Then whether there is an effective means for effective governance of this bad relationship?In recent years, the exposure of China’s media for the negative news has become a social hot spot, especially the news on the non-pecuniary compensation. Many studies have shown that the media has played an active role in corporate governance. For voluntary disclosure of information is part of corporate governance, will the exposure of enterprises, especially the state-owned enterprises have an impact on the disclosure of the executives non-pecuniary compensation? Can it weaken the negative relationship between the compensation regulation of the managers of state-owned enterprises and non-pecuniary compensation voluntary disclosure? This is the focus of this study. Then, this article will also examine if the different nature of media coverage plays a different role in governance.Study innovation and significance:First, the study adopts a new approach to measure on non-pecuniary compensation voluntary disclosure. The previous measures were on pricing capital market purposes, ignoring the voluntary disclosure of the performance evaluation function. The indicators of this article both taking into pricing account the accounting information and performance evaluation function, so that it can reflect more meaning. This study deepens the relationship of the compensation regulation and non-pecuniary compensation voluntary disclosure. This will help the manager to unscramble the voluntary disclosure of data better.Secondly, this study adds the media’s supervision into the compensation regulation and non-pecuniary compensation voluntary disclosure to research that whether joining of the media’s supervision can weaken the negative relationship between the compensation regulation of the managers of state-owned enterprises and non-pecuniary compensation voluntary disclosure.Meanwhile, according to the nature of media, the media is classified as positive coverage, neutral reports and negative reports into three categories. It can examine if the media coverage of different nature play a different role between the relationship of the level of executive compensation regulation of state-owned enterprises and the non-pecuniary compensation voluntary disclosure.In summary, this article explores if the media’s supervision can effectively solve the problem of the negative relationship between the level of executive compensation regulation of state-owned enterprises and the non-pecuniary compensation voluntary disclosure, so that the media’s supervision can be effective socialization of management methods. That is, this study expands the understanding of the literature on the company’s external governance mechanisms.Research methods and ideas:1. Firstly, the sample group was classified as the group of state-owned enterprises and the group of non-state-owned enterprises. The data group of non-state-owned enterprises was used to estimate the predictive models of normal executive compensation, and then calculating the value of the normal salary of the state-owned enterprise managers. Then the study estimate the value of the normal salary minus the manager’s actual salary value of state-owned enterprises, in order to measure the degree of the compensation regulation of state-owned enterprises.2. The article improves the measure method of non-pecuniary compensation voluntary disclosure index. The old measure method used only eight amounts of non-pecuniary compensation disclosure items. It was too simple. The measure method of non-pecuniary compensation voluntary disclosure index of this article is more comprehensive and more accurate.3. Using the above data of non-pecuniary compensation voluntary disclosure index and the compensation regulation of state-owned enterprises, through the establishment of the regression model, this article will research the impact of compensation regulation of state-owned enterprises to non-pecuniary compensation voluntary disclosure.4. The study brings the media into compensation regulation and non-pecuniary compensation voluntary disclosure in order to examine if the media monitoring would reduce the negative relationship between the compensation regulation of state-owned enterprises and non-pecuniary compensation voluntary disclosure.5. According to the nature of media, the media is classified as positive coverage, neutral reports and negative reports into three categories. So that it can examine if the media coverage of different nature play a different role between the relationship of the level of executive compensation regulation of state-owned enterprises and the non-pecuniary compensation voluntary disclosure.Study conclusions:In this paper, form the agency cost in agency theory and the property costs in signaling theory, it study the impact of compensation regulation of state-owned enterprises to non-pecuniary compensation voluntary disclosure. Through an empirical test, this study found that the executive compensation regulation of state-owned enterprises will significantly reduce the level of non-pecuniary compensation voluntary disclosure, which may make the potential increase of the agency costs of state-owned enterprises.After joining the factor of the media supervision, based on the administrative governance mechanism which based on asymmetric information theory, through the establishment by adding interaction terms of compensation regulation and media reports to the empirical regression, this article analysis the impact of media reports on the relationship between the executive compensation regulation of state-owned enterprises and the non-pecuniary compensation voluntary disclosure. After the empirical test, it verified that the news media do play the role of its corporate governance, and the relationship between the executive compensation regulation of state-owned enterprises and the non-pecuniary compensation voluntary disclosure is no longer significant.Further, according to the nature of media, the author classified the media as positive coverage, neutral reports and negative reports into three categories. From the reputation mechanism theory and communication theory of audience demand starting, this article analysis the different governance effects of the media coverage of the different nature on the relationship between the executive compensation regulation of state-owned enterprises and the non-pecuniary compensation voluntary disclosure. Through empirical testing, I found that, different from the traditional view, not only the negative reports but also the positive reports and neutral reporting played an active role in reducing the relationship between compensation regulation and non-pecuniary compensation voluntary disclosure level.The lack of the research:First, this study only selected the media reports of "The China Securities Journal" as the sample. But it can’t be fully representative of the various media reports. So the research findings may have some limitations.Second, the nature of the news media is manually classified by the author. It is inevitable to substitute the subjective wishes of the author into the study. Then the nature of some news media can’t be completely correct measured.Future research directions: The choice of the news media carrier’s range can be increased. Then Media reports can be distinct by sources, such as the classification of the national media and regional media, and the classification of local media and nonlocal media. After that, we can study the different treatment effect of the different sources of media coverage on the relationship between the executive compensation regulation of state-owned enterprises and non-pecuniary compensation voluntary disclosure level.