Media Supervision, Executive Compensation And Perks

In China’s listed companies, perks, as a widespread phenomenon, has got arapid growth momentum in recent years. For example, Sinopec Group spent1.68million to buy Mao tai and used130,000to print business cards in2011. Due to theincompleteness of the company’s contract and the normal production and operationneeds, perks behavior is inevitable, which itself has a certain rationality. However, inmany of our companies, perks is far beyond reasonable levels, resulting in expensiveagency costs. In view of the previous studies on media monitoring and perks havelittle research, This article is an empirical study on the relationship between perks，executive compensation and the media supervision. the paper selects listed companiesby reported as research group and the time during2007between2011.According tothe results of empirical research，the paper points out that:1)The quantity of report onmass media has a negative impact on executive compensation. This effect applies tolisted companies from all industries but is stronger on those from state-ownedcompanies.2)There is a mutual negative impact between executive compensation andperks. That is, low executive compensation drives up high perks. Also, this effectapplies to all companies but is stronger on listed companies of state-owned companies.3) when the executive compensation is high, reports on mass media will increase thepossibility of positive perks.Based on these empirical conclusions, the paper raised management implicationsrole of media on executive compensation，perks and the media supervision. Therefore,when it’s time to modify governance and improve wage, the perks should beconcerned. Moreover, it is necessary to perfect the mechanisms for corporateoversight and enhance the transparency of information disclosure to the topmanagement payment.