Research On The Relationship Between Executives Nature And Executives Compensation And Earnings Quality

Under the transition economies in China, the family firms has been playing a very important role. With the growth of family firms, external professional managers of family firms began to gradually occupy the middle and senior management positions. In the family firms, management incentive compensation is different between different managers, as executives within the family members and the introduction of external professional managers to pay the reaction is different, whether external professional managers will have greater intense reaction for a large amount of payment? At the same time,what kind of impact on earnings quality in family firms, if there are external professional managers in them, is there a positive effect, or negative role?In this paper,we regard family listed firms as the research object, and refining nature of family executives. Family executives are divided into external professional managers. According to the Agency Theory and Salary Contract Theory, combining features of our executive management of the family firms, research the nature of the relationship between the family executives of listed companies and executive pay, earnings quality. On the basis of family listed companies’ sample,of China Shanghai Exchange and Shenzhen Stock Exchange on A-share from 2009 to 2013,which is suitable of family business definition and the controller of listed companies who ultimately was no change. Through empirical analysis,we found that external professional managers of family listed firms to compensation- performance reacted more strongly, but within the family members’ is not sensitive. Besides, the results of the study of family earnings quality of family listed firms shows that within the family members of the senior executive,with higher earnings quality in firms, and external professional managers may be affected by the compensation-performance of leading lower earnings quality.