Empirical Research On The Executive Compensation Base On The Perspective Of Social Influence

With the continuous development and perfecting of company control system ofChina, executive compensation as an important mechanism of corporate governancesystem, also aroused the interest of more and more scholars. From the initial optimalcontract perspective, by this time the managerial power perspective；Scholars of ourcountry continue to explore the determining factors of executive compensation andinfluence factors. As an individual in society, executives of the listing corporationcan’t be independent from social network, only from the perspective of optimalcontract and managerial power perspective can’t explain the chaos of executivecompensation very well. Following the China Securities Regulatory Commissionrequire listing corporation must improve the implementation of the guidance for theindependent director system, the independent director system has gradually becomean important mechanism of corporate governance system in our country. This also isthe realistic basis to explain executive compensation phenomena with the socialcapital and social psychological factors. Does social capital and social psychology inChina Institutional environment also affect executive compensation? These papersmake an empirical study on whether the social capital and social psychological factorsin our country affect the executive compensation and its influence degree.Based on the existing domestic and foreign research, through summary the basicof social influence theory-----social capital and social psychological theory researchliterature theory, listing corporation in Shanghai and Shenzhen two city as researchsample, in China’s unique institutional background, analyzes the social influencepower influence of on the level of executive pay. Through regression analysis, we getfollowing conclusion:1. Social capital and social psychological factors can synthesize the personalsocial influence, when the social influence of executive is higher than that of theindependent directors, executives can get higher compensation level.2. The social influence power was measured by social influence comparedvariables、age compared variables、tenure compared variables and education relativesimilarity variables. Social influence compare variables, age and tenure compared variables are having significant positive effects on the level of executive pay. Theterm of tenure compared variables have significant negative impact on executivecompensation level.3. Reciprocity behavior existing between executives and the independentdirectors of the listing Corporation. When executive is a member of the remunerationCommittee, but independent directors are all not a member of the remunerationCommittee, Reciprocity behavior phenomenon will be more serious.4. Corporation’ different institutional environment characteristic will affect therelationship between social influence and executive compensation. Compared to nonstate-owned holding company, social influence compared variables and age comparedvariables of social influence power in the state-owned holding has more impaction onexecutive compensation, they will increase the level of executive compensationsignificantly.