Management Incentive And Cash Dividend Policy Research

The separation of the management and the owners, leading to the presence of Chinese enterprisescommissioned agency costs, and thus exists between management and shareholders interests of the game.Analyzed from the point of view of rational managers of Chinese enterprises special feature, namely theseparation of management and owners, management will not maximize shareholder wealth as the goal, andfor the purpose of maximizing their own utility. Existence of asymmetric information, the management willuse their informational advantage to make itself the most favorable cash dividend decisions. In order toavoid adverse selection and moral hazard of the company’s management, they will choose the company’smanagement compensation contracts signed in order to motivate or restrict their operation and managementactivities, under the constraints of such compensation contracts, power management efforts work, therebyreducing the infringement of the interests of shareholders. In reality, the majority of our enterprises in thegrowth stage, the listed companies there are different financial characteristics for the differentcharacteristics of the company, management incentive for the effect of the cash dividend policy may alsovary. Therefore, in order to explore the impact of management incentive cash dividend policy, in this articlethe data of2007-2011, China’s Shanghai and Shenzhen A-share listed companies based on empirical test ofthe relationship between management incentive cash dividend policy, as well as in different growth, thenature of equity management incentive cash dividend policy.The study found that:(1) The management incentive is stronger, more listed companies are willing topay cash dividends, and the higher the level of payment of cash dividends.(2) With the improvement ofgrowth, management of power and willingness to pay cash dividends and pay levels positively correlatedwill diminish.(3) management incentive is stronger, the smaller the state-owned property companywillingness to pay cash dividends than non-state-owned property company, the lower the level of payment.Empirical Analysis Based on the above conclusions, to restrain the negative correlation of power inthe management of the cash dividend policy, we asked the following policy recommendations: First, tofurther improve the management incentive contract mechanism. China’s special political background totake full account of the nature of China’s listed companies, to develop a practical and effective incentivemechanism to ease the management and shareholders of the first class of agency problems, improve thecorporate governance mechanism. Second, increase the intensity of management information disclosure oflisted companies, to give management an effective incentive, but also the implementation of effectiveregulatory management.The conclusions of this study certain guiding significance for the management of listed companiesincentives to develop and provide a guarantee for the listed companies in the development of effective cashdividend policy. The conclusions of this study, the incentive system for the management of the different growth, the different nature of equity of listed companies, the cash dividend policy development hasimportant theoretical and practical significance.