The Research Of The Relation Between Management Agency Cost And The Performances Of Mergers And Acquisitions

Senior manager compensation has been a hot topic among people.Thecompany give manager a generous salary is to motivate them to more hard work,inspiring them to improve the performance of the company.But whether theimplementation of the incentive plays its proper effects, and whether theimplementation of the incentive can reduce agency cost?These are the questionwill be answer in the paper.In addition, the administration authorities as theimportant decision-making of investment activities in the company and thedecision-making of them directly affects the success of a company, M&A is one ofthe investment means,But many M&A are not rational investment activities, theycan not bring the company more broad prospects.But whether the result of M&A isgood or not, manager all can benefit from M&A.The explanation of thisphenomenon will be given in this paper.This paper employs307corporations from the listed companies in China whichhave implemented M&A transactions from2007to2009.and at first in order toanalyze manager gency cost the paper choose the position-related consumption, cashincentive and equity incentive three integrated dimensions.Then based on the agencytheories of manager compensation incentive and M&A to analyze the relationbetween manager agency cost and performance of M&A.Finally use statisticalsoftware SPSS17.0to do the regression analysis of four models in the paper.In conclusion,the relation between manager agency cost and performance ofM&A is significantly negative.and the position-related consumption has a significantnegative effect peformances of M&A, manager compensation incentive andperformance of M&A has no apparent relation, whether cash incentive and equityincentive doesn’t play its proper effects,but the relation between manager agencycost and the size of M&A is significantly positive.Through these researchconclusions we are easy to find that agent problem is exist in the salary incentivemechanism,that company scale as a measure of management performance indicatorhas very big limitation and design of salary system need to be further improved,andthat M&A can become seeking tool under certain conditions and manager investmentactivities need strong supervision and reasonable guidance.