Media Supervision, Executive Compensation And Corporate Performance

The agency problem in modern enterprise system caused by the principal-agentrelationship is a widely concerned topic of academia. Executive incentive and supervisionare effective ways to solve this problem. On the one hand, the compensation as the mostimportant means of incentive, has been a focus of scholars. Through media reports of thelisted company executive compensation ranking every year, real estate listing corporationexecutives were shocked to the forefront. Even under the influence of the subprime crisis,the development of the real estate industry downturn, the executives of estate industry werestill enjoying high compensation. This raises the question of efficiency about thecompensation performance contract of real estate industry. On the other hand, supervisionof the executive is more from the inside. And the high compensation probably is caused bythe failure of internal supervision. In contrast, media supervision as a more effective way ofexternal supervision, has certain constraints on executive compensation. When mediareported the real estate listed company executive compensation, the executives wouldunder the pressure of public opinion to improve their compensation, so that thecompensation would be more reasonable and effective.Based on the current situation of the development of the real estate industry in ourcountry, we use the method of standardized research and empirical research, founding thatChina’s real estate listed company executives monetary compensation really has a positivecorrelation with corporate accounting performance, showing that the executivecompensation of listed company of real estate in our country gradually realized the linkwith the performance of the principle, the compensation performance contract is morereasonable and effective. And the correlation of executive compensation and corporateperformance of listed companies of real estate increased significantly under the role of themedia supervision. Media supervision can strengthen the effectiveness of compensation performance contract. By further grouping study we found that market oriented mediasupervision is obviously better than that of policy oriented media supervision results, whichshows that China should further improve the media market competition mechanism,strengthen the supervision of all media, thereby enhancing the effectiveness ofcompensation performance contract.