The Research On Relationship Between Executives Perks And Corporate Governance Based On The Behavior Of Executives In Terminal Years

Existence of incomplete contract and the objective conditions of asymmetric information, a listed company executives could use opportunistic behavior to invade the value of the company, and this motivation become more intense at the end of the term. China’s listed companies system is not perfect, disclosure requirements are more lenient, making perks become ways for executives to get private benefits. Based on the terminal years of CEO’s term which high incidence of opportunistic behavior happen, the study is important to find the impact of perks and provide evidence to regulate the market.This study reviewed the existing literature on executives motivation and reason. Use all the listed companies in China2006-2012and2010-2012executives change data, using the residual method to estimate the scale of perks, leaving the introduction of dummy variables, research executives from the impact of terminal years of tenure on perks, inspection of corporate governance mechanism in the process of treatment effect.First, Terminal years increased executives consumption. Terminal years and job consumption have significant positive correlation, CEO’s rent-seeking motives befor leaving are more intense.Second, corporate governance mechanisms such as independent board of directors, the external competitive environment, managing holdings and other governance structure ease the perks before leaving. Non-state-owned property, forced changes and internal successor ease the impact on perks from terminal years.Third, consumption is not conducive to value of the company, the perks negatively correlated with firm value, damage value of the company, there is no incentive to play the role; excessive consumption and the executive compensation are positively correlated, indicating that over-the-job consumption is not supplemented, are executives opportunistic behavior before lost control of the company.