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Viscous Of State-owned Listed Companies Under The Control Of Executive Pay Compensation

Posted on:2014-01-25Degree:MasterType:Thesis
Country:ChinaCandidate:Y Q LiFull Text:PDF
GTID:2269330398963027Subject:Business management
Abstract/Summary:PDF Full Text Request
The Optimal Contract Theory supports that executive compensation contracts shouldbe an increasing function of the enterprise performance. However, in the domestic listedcompanies, especially in the state-owned listed companies, executive pay chaos began toappear from years ago. Although these listed companies’ performance fell even lost, theirexecutives pay still increased significantly. This phenomenon that the executive payincreased greater with the rise of corporate performance than reduction with the decline inbusiness performance is called the executive pay viscosity. Our government must not turna blind eye on the asymmetric relationship between executive pay and corporateperformance, so it has issued a serious of remuneration regulation policies to put thestate-owned enterprises executive pay under surveillance. Well, how these remunerationregulation policies affected on the relationship between executive compensation andcorporate performance in the domestic listed companies? And were they alleviate theexecutive pay viscosity? This article will be committed to solve these problems.By using a combination of theoretical analysis and empirical analysis, this paperdiscuses the relationship between the state-owned listed company executive compensationand corporate performance. The first chapter is an introduction. It introduces thebackground and the significance of this study, the main contents of this paper and theresearch methods, etc. The second chapter defines the concept of executive compensation,remuneration regulation and compensation viscosity, and then summarizes the relevantliteratures about the relationship between executive compensation and corporateperformance. The third chapter explains incentives of executive compensation andexecutive pay viscosity in theory by using Optimal Contract Theory, Theory ofManagement Power, Human Capital Theory and Two-factor Theory. The fourth chapter,by using multiple regression methods, examines the sensitivity between executivecompensation and corporate performance of domestic state-owned listed companies, doesthe empirical test for the existence of executive compensation viscosity, and furtherdiscusses the structural features of executive pay viscosity, and then analyses theeffectiveness of the remuneration regulation policies. The final chapter summarizes theconclusions of this study, and puts forward feasible suggestions.Our findings are:(1) under the remuneration regulation, there is a positive correlationbetween executive compensation and corporate accounting performance in domesticstate-owned listed companies, and there exists executives pay viscosity;(2) Executivecompensation in domestic state-owned listed companies has correlation with enterprise scale, the proportion of the independent director in the board of directors, etc;(3) Thesensitivity of executive compensation and corporate performance is the inverted U-shapedchange with the increase in corporate performance;(4) Compared with state-ownedenterprises controlled by local governments, the central enterprises executivecompensation viscosity is smaller;(5) Initially, the remuneration regulation policies canenhance the sensitivity between the executives pay and corporate performance, and alsoweaken the executive compensation viscosity, but the effectiveness is the oppositeafterwards.
Keywords/Search Tags:remuneration regulation policies, executive compensation, corporateperformance, executive pay viscosity
PDF Full Text Request
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