An Empirical Research On Effectives Of Executive Compensation Sticky Of Listed Real Estate Companies In China

There is a separation between ownership and control in modern companies, leadingconflicts of interest target between owners and operators of senior management. Thekey point of company’s management focus gradually transferred from physical capital tohuman capital. Logical salary incentive mechanism may improve the enthusiasm ofsenior managers and work efficiency, devoting themselves into responsibilities,effectively avoiding some bad phenomena such as brain drain, short-term behavior, etc.In recent years, in terms of nonlinear relationships between corporate performance andthe payments of senior managers, i.e. sticky characteristics of executive compensationare gradually attracted the attention of scholars. Executive compensation sticky refers toa phenomenon in which when the performance of the company risen, levels of executivecompensation obviously increased, Meanwhile the performance in the company fall,executive compensation did not fall or drop in a small extent. Namely, performance ofsensitivity in executive compensation is asymmetric. This paper is started from theangle of executive compensation sticky, setting the real estate companies in China as theresearching object, studying the effects of characteristic with adhesion about executivecompensation on future performance of companies, in order to improve executivecompensation incentive effect which is rather important.Based on relevant theories in this paper, the problem of executive compensationsticky and its effectiveness of real estate companies are researched. First of the threeaspects: the relationship between the payments of senior managers and corporationperformance, costs and compensation sticky and executive compensation sticky effects,the current conditions on the international and domestic study are reviewed andcommented. Secondly, the theory about principal-agent and economics of information,human capital theory and the theory of incentive compensation are reviewed. Again, thecharacteristics of the real estate industry are briefly introduced, current situation and thetrends of future, executive compensation in real estate companies and situation ofcorporation performance are analyzed. Finally, from2009to2012, A-share of real estatecompanies in Shanghai and Shenzhen for studying, the relationship betweencompensation and viscous issues are tested in regression, on this basis, the kind ofviscous effects of future performance are analyzed. For ensuring the reliability and accuracy of the studying results, remunerations are carried out for robustness tests, totake a data of lag.Different from theoretical analysis and empirical researches, conclusions afteranalysis in this paper are as follows:(1) From2009to2012, EBIT withoutnon-recurring profit is chosen as a variable of performance, the payments of seniormanagers in China’s real estate companies and the performance for the year are innotable positive correlation.(2) The payments of senior managers of real estatecompanies in china is of obvious asymmetric characteristics, the rate of increasing whenpay performance increases was significantly higher than the rate of dropping when payperformance decreased, there exits viscosity. Amplitude when executive compensationrose is3.51times to the amplitude when executive compensation decreased.(3)Executive compensation sticky of China’s real estate company has a negative influenceon the company future performance.(4) Job consumption has a contribution tostrengthen executive compensation viscosity.(5) Enterprises in different types ofownership are respectively for regression, different from non-state-owned companies,itis validated that corporation executives compensation has a stronger correlation withperformance, and the state-owned companies obtain a important executivecompensation viscosity, while none-state-owned enterprises does not exist viscosityphenomenon.