| BACKGROUNDVenture capital originated in the United States in the1930s, its booming since the end of the century the rise of the Internet to people familiar. The development of China’s venture capital industry was late, germinated in the mid-1980s. China’s venture capital industry was originally developed under the Government to promote the guide together. The period of2005to2010is the rapid development of China’s venture capital stage. But from2010, the China Venture Capital has entered a period of adjustment. Venture capital competition has become more intense in the period.90%of venture capital institutions risk being left behind. To improve the quality of value-added services and to strengthen post-investment management, are powerful weapons for venture capital institutions to deal with competition.The rapid development of China’s venture capital, makes more and more people recognized the role of China’s economic development. Venture capital is not only able to fund venture enterprises development, but also be involved in the corporate governance of venture enterprises and the operational decision making to provide specialized help and supervision. Venture capital can effectively improve the level of corporate governance and management.The low level of corporate governance has been a key factor restricting China’s enterprises’ development and growth.To establish an effective incentive mechanism can significantly improve the company. However, in recent years, frequent "inversion phenomenon "of executive pay and company performance. Enjoying high annual salary that a listed company executives decline in the performance of the company or even losses, and tend to the annual salary of a short-term incentive.That makes executive pay facing prominent issues of incentive incompatibility.Therefore, under the Background of executive compensation incompatible with incentive constraints,to study whether venture capital can improve the executive compensation incentive effect is very meaningful.PURPOSEThe purpose of this paper:1.by studying factors affecting executive pay, analysis venture capital whether has impacts on the level and structure of executive pay of venture enterprises.2.study "Collusion" whether exists between the CEO and the board of directors.3.research executive compensation whether is valid, as well as venture capital whether improves the incentive effects of executive pay. The results of the study can help enterprises establish effective remuneration mechanisms also can help decide to Cooperation with venture capital.The study results provide a reference for venture capital institutions involved in venture enterprise.MAIN CONTENT AND VIEWThe main content of the paper includes the following sections:Chapter I Introduction includes four parts:research background and significance of research technology roadmap, research methods and the main contribution of this paper and deficiencies. This chapter describes the purpose of writing, writing ideas and articles framework, commands of the full text.The second chapter of the literature review include:venture capital concept to clarify,the foreign literature review, the domestic literature review, Chapter Summary,four sections.the concept to clarify Section introduces the concept of venture capital and the characteristics of venture enterprises, non-venture enterprise to lay the foundation for the full text of research, the domestic and international literature review section collect the literature on the relationship between executive pay and performance and institutional investors affected the relationship,two aspects. Finally, this chapter summarizes and determines the direction of this study.The third chapter is theories part to explain venture capital impacts executive pay levels of incentives and effects. In the first section, use the principal-agent theory to analyze the agency risk and dual agency relationship in the venture capital institutions’ investment risk and high-risk characteristics that is Why venture capital need to affect the executive compensation; Principal-agent theory and Human capital theory explain the executives need incentive Compensation; Incentive theory provides guidance for how executives incentives. The second section analyzes venture capital by expatriate directors to participate in the Board of Directors and gambling agreement signed with the executives. All of this can impact of executive pay levels and structures. the third section from the oversight of venture capital behavior, value-added services, investment characteristics explains the impact of venture capital on executive pay. Final part is Chapter Summary section.venture capital investment behavior in the Summary section, classified as two types:one is to change the behavior of excitation intensity (that is, to change the level and structure of executive compensation, gambling agreement);, the other is not changing the excitation intensity (affect corporate performance, management the efficiency behavior):supervision and behavior to reduce agency costs affect the performance. The behavior of value-added services on the one hand for the enterprise performance; the other hand, value-added services management recruitment and regulate operations integrated enterprise resource to improve the efficiency of company management.Empirical regression analysis was carried out in the fourth chapter. The first section introduces the data sources and sample selection. In this paper, according to certain criteria, select the companies listed on the SME board and GEM2008-2010. Section Ⅱ introduces the selection of variables. This paper results of variable selection ROE. This paper studies the executives currency the remuneration.election CEO (million) annual salary’LOG value as CEO pay variable. In the Board of Directors the top three in total revenues’(million)LOG value as the Remuneration variable. The next part is the assumption of this article. Assumption1, compared with the non-venture enterprise,venture executives have higher levels of incentives. Assuming1.1-venture enterprises and non-venture enterprise, there aren’t differences in the level of monetary remuneration of the Board of Directors does not; assuming a1.2-venture enterprises and non-venture enterprise, not differences in the level of CEO monetary remuneration; assuming1.3compared with non-venture enterprise, venture corporate CEO has a a higher stake; assuming1.4compared with non-venture enterprise, venture corporate boards have a higher stake. Assumption2, compared with non-venture enterprise venture executive pay can bring more performance. Assuming2.1compared with the non-venture corporate venture corporate CEO pay can bring more performance; assuming2.2compared with non-venture enterprises, the venture corporate boards pay can bring more performance; assumptions venture capital can affect the venture of corporate CEO pay relationship with the Board and remuneration, and thus be able to improve its performance. The fourth quarter is the order of the analysis in accordance with the descriptive statistics, correlation tests, empirical regression results,verify the certificate of the assumptions of this article. Section Ⅴ is part of Chapter Summary. Mainly summarizes the empirical ideas:1when independent samples T-test and-empirical regression verifies assumptions prove influential executives shareholding proportion of venture capital investment companies, had no effect on the executive level of monetary remuneration. CEO*VC/D3*VC This cross-variable performance pay model to examine the coordination effect when testing hypotheses; in testing hypotheses3, through the use of residuals of the remuneration model, identify CEO pay Board Remuneration part. Then grouped (venture-backed companies and venture capital background of the company) regression to compare the differences, and to test the hypothesis3.The fifth chapter is the paper concludes with recommendations section. The first section is a comprehensive summary conclusion of this article:1, Corporate executive compensation between venture enterprises and non-venture enterprise differences:in monetary remuneration levels, the venture-backed enterprise executives slightly lower but statistical regression isn’t significant.In executives stake part, venture-backed company executives higher stake.2, The remuneration of the Board and CEO pay has a strong correlation, there is the phenomenon of conspiracy.3, Venture capital have a positive impact on venture corporate executives remuneration incentive effect:venture capital improves the performance of CEO compensation, but also improves the Board’s remuneration performance.4, Venture capital can improve the performance of the overall of corporate executives pay. Through the venture enterprise compared with non-venture enterprise Regression found in executive pay:the non-venture enterprises have self-serving behavior:pay increasing can not bring increasing performance.In the venture enterprise, executive compensation, there is no self-serving behavior. This shows that venture capital can improve corporate governance.5, Our executive compensation incentives can bring certain results.Part of executive pay in a non-venture enterprise, had no effect or even negative correlation with the company’ performance. This type of executive pay is unreasonable part.6, The proportion of executive stock ownership did not have a significant impact on the company’ performance. In addition, the company declared equity incentive program also had no significant effect on the performance of the company. This shows our executive equity incentive effect is not ideal. Section II is the main recommendations section of this article. In this paper, from the capital markets, venture capital firms and corporate to recommendations. Capital markets:1, development relevant laws and policies.2, Set up a venture capital institutions Association to strengthen the information disclosure of venture capital institutions, venture investment:1,Master key resources to create the material basis for high-quality, value-added services.2, Establish long-term strategic partnership with accounting firms, management consulting firm.3, Establish a standardized, scientific investment management process.4, Scientifically and rationally draw up the standard and scope of venture capital institutions supervise, participate in management. management. Enterprise aspects:1, Take full advantage of the manager market, enhance market supervision.2, Strengthen the oversight of executives.3, Give full play to the good long-term incentive equity incentive measures. Efforts to promote executive pay market-oriented, the establishment of remuneration with the performance of the company fluctuate fluctuation mechanism. Section Ⅲ is a follow-up study outlook, and pointed out some shortcomings of the place and can be further studied.CONTRIBUTIONSThe main contribution of this paper is manifested in the following aspects:1, The special institutional investors--venture capital institutions is included in the study of executive pay and performance relationship, and refinement of research in the field.2,In study design, combined with domestic and foreign research model separate study, the Board and CEO. Simultaneously by multiple regression to identify the part of the Remuneration and CEO pay. This makes it studied more in-depth.3, Verify venture capital have a positive impact on executive incentive levels and effects, also provides a framework to analyze it. This is to provide a reference for future research. |
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