An Empirical Study On The Measurement Of Excess Perks And The Relevance Of Excess Perks And The Corporate Performance

In recent years, with the extremely expensive wine events of Sinopec, the wine events of Gree and other perks scandals, perks issues are highly concerned in the community.The Government has also developed a number of documents used to regulate the behavior of corporate executives, especially the executives perks behavior of State-owned enterprises.Specifically, the Ministry of Finance and other ministries formulated the multiple files,Interim Measures for the supervision and management of state-owned enterprises SOE executive perk behavior, Interim Measures for the supervision and management of Central Financial Executives perk behavior in2012, in November2013Economy against waste regulations in Government has been issued to cancel general official vehicles. In August2014, the political bureau of the CPC central committee approved reform program of executive pay in Central enterprises, Opinions on reasonably determined and strictly regulated the treatment and business spending of the central business executives to perform their duties, which is to resolutely removed all spending unrelated. These decrees, Regulations successively promulgated and implemented show that strictly control the-job consumption, oppose extravagance and waste has become a common concern of the whole societyHowever, Wan Waring (2007) has pointed out that, as an implicit incentive of the management, perks has a dual theory attributes. There are many advantages of perks.It can enhance the company’s sense of dependence and loyalty of employees, improve organizational efficiency, but also may reduce the value of the company and have a serious negative impact on company performance.We believe that serving the dual attributes of perks exist in different enterprises, and there are double-sided property of perks in the same enterprises. So two parts are included in the total consumption,that is reasonable and excessive components.Reasonable job consumption, namely positive perks, help to enhance corporate value and corporate performance. The unreasonable content, that is negative job consumption, hinder the development of enterprises.Public, government departments need to monitor and control the job consumption is the latter, that total spending in that part of the job beyond a reasonable ingredients.Public, government departments need to monitor and control the latter, which is beyond the reasonable part in the total spending.The key to effectively regulate the perks is how to reflect the level of perks and excessive consumption, which is also the focus of this paper.Firstly,Perk is redefined in the paper which is beyond the normal operating costs and is consumed by executives. Then based on the description of former perk measurement,"payments relating to other operating activities cash flow" is made as a logical starting point, according to the demand of the enterprise, we distinguish the normal commercial costs from the total through characteristics of the enterprise’s business activities and the residuals of regression represents the perks. And then this paper has collected the data from the companies which have listed in the Shanghai Stock Exchange and Shenzhen Stock Exchange with A share from2010to2012as sample. The perks above-mentioned is adopted to verify the impact of perks on performance.Surrounding on the research topic, there are six parts in this paper:the first paper is the introduction, mainly elaborating the significance of the topic and research background, research contents and research method, and innovation points; the second part is a literature review, the measurement,factors and economic consequences is described.; the third part is mainly to put forward a model to analyze the unnormal perks based on the definition of perks; the fourth part is to analyze the related theories and put forward the assumptions in this paper; the fifth part is to introduce the study design, including sample selection and data source, variable designs and model design, the empirical examination and analysis, including descriptive statistics on sample and the empirical examination on the three assumptions; the sixth part is to propose some policy and suggestions basing on the empirical conclusion.This paper shows that Perks of executives have a significant negative effect on the current year and the next two years performance by conducting research. However, the negative effect is not significantly different beween state-owned listed company and non state-owned.which reminds us to take measures immediately to govern Perks.