Research On The Effectiveness Of High Salary For Clean Government Under The Supervision Of Listed Companies

Listed company is the cornerstone for the existence and development ofstock market. The relationship between listed company information disclosure,corporate governance and accounting audit is so intimate, moreover they arebonding with the protection of the investors’ interest. So how to effectivelysupervise the problems, such as the listed company information disclosure,directly affects the interest of the small investors. Whereas the supervision is auniversal puzzle, even for the developed countries equipped with comparativelymature financial market. China capital market influenced by immature legalsystem and the corruption of managers, leading to problems like the untimelylisted company information disclosure, misguiding the investors and non-formalrelated transaction, greatly harms the investors’ interest. Among them thesupervision difficulty brought by managers’ rent-seeking behavior is tougher.With recent year’s discussion of how to inhibit the rent-seeking behavior ofthe officer, the design of high salary system for clean government turns to be acrucial research direction. Additionally, the successful research cases in HongKong and Singapore that effectively use the high salary system for cleangovernment provide scholars practical examples. This paper is based by thistheory and background. Starting from the current condition of listed companies’supervision, analyze the supervision goal and development history of China listedcompanies, noting the major problems of listed companies under the supervision.Then aiming at the manager bribe taking, this paper takes the hypothesis ofrational man to analyze the act of accepting bribes in the field of economics.Setting principal-agent relation between the regulators and managers undersupervision of listed company in China under the hypothesis that the interest of small investors and managers bribe taking behavior is randomly negativelyrelated, apply the theory of principal-agent to design operative mechanism ofhigh salary of clean government. Study the effectiveness of the system designfrom the angles of different risk preference of the managers. In the asymmetricgame between regulators and managers, the study finds high salary for a cleangovernment policy can only provide an effective interval for small investors whoare defined by middle level and above. As for those with high interest interval, itdoes not work so well. So it cannot attain the expecting result as the policiesanticipate when the policy makers are so obsessive of increasing the payment ofthe managers. This conclusion offers a new theory basis for optimizing themanagers pay structure and applying the corresponding regulation in theregulators.