Study On Influence Factors Of Executive Exempted From Pay Penalty

In recent years, there has been a huge contrast between some companies’s sluggish performance and generous salary. The rationality of the hign salary has been questioned by investors. What is the influence factors of executive compensation,Why management can escape from the penalty of compensation? Research in this area is valuable for the development of Chinese capital market and the improvement of corporate governance.Firstly, this paper has analyzed the present situation of ST listed company’s executive compensation.We found that:(1)Management has a very low percentage of stock and the salary structure is unreasonable;(2)The ST listed company’s executive compensation is less than the average level of non-ST companies;(3) In terms of executive compensation, there is a great difference between the two kinds of companies;(4) There are more than a third of companies whose mamagement can escape from the compensation penalty, but the percentage is declining year by year.By using the301samples over6years from2007to2012, this paper has found that:(1)there is a significant positive relation between the power of management and the management exempted from pay penalties.This means that the greater management power is,the more exempts executives can obtain from pay penalties.(2)The cash flow ratio has a significant influence on the dependent variable,this means that the stronger the debt paying ability is,the easier the executives can escape from pay penalties.(3)The TobinQ plays important role in pay penalties, this means management is more likely to escape from pay penalties with a greater ability to grow;(3)The results also show that the management of state-owned enterprises can escape from pay penalties more easily. This paper also conducted a robustness test,and the test results basically consistent with earlier findings.Finally, on the basis of the theoretical and empirical analysis,this paper propose appropriate comments and suggestions.