| Corporation investment behavior has been a hot issue in theory and practice research. Companies rarely follow the investment model to make the best investment, so that there is a widespread phenomenon of inefficient investment in company. Overinvestment is non-efficient investments. At the micro level, overinvestment harms the interests of shareholders and creditors; from the terms of the macro-level, overinvestment cause idle resources, resulting in a serious waste of resources. Since the company started its investment behavior research, domestic and international scholars have from different perspectives researched the causes of the overinvestment and the means to suppress excessive investment, which has generated a lot of research achievements and has some practical reference value. However, the fact that there is still a widespread phenomenon of overinvestment needs us to break the shackles of traditional thinking. It is required that we should make more comprehensive explanation of the investment vision not only from the traditional financial theory but also from other angles, to make up for the shortcomings of traditional financial theory.Behavioral finance was produced, especially the "upper echelons theory", proposed to us excessive investment research provides transformational perspective. In traditional financial study, we usually assume that the company’s managers are homogeneous, which is not consistent with the reality. The reality of the managers is heterogeneous. Different managers have different cognitive levels, values and risk preferences, and these differences lead managers even face the same situation may also make different investment decisions, leading to differences in the impact on the company and its shareholders. However, due to the cognitive level managers, values and risk preferences play a role in decision-making is not easy to measure qualities, yet not for the quantitative study, so often the manager of gender, age, education, work experience, such as term limits and background characteristics managers to measure heterogeneity. Academics still continue to explore how best to measure managers’ heterogeneity, making research more realistic, more practical significance conclusions.Firstly, the previous literature reviewed, and made a commentary. After this paper different principal-agent theory, incentive theory, the senior echelons theory, asymmetric information theory and overinvestment theory as the theoretical basis, explore the CEO background characteristics is how to influence CEO pay excessive investment and proposed on this basis9hypothesis, after setting the explanatory variables, the explanatory variables and control variables, whereby constructed three multivariate regression models. In this paper,2008-2012Shanghai and Shenzhen A shares listed on the Main Board of the company as research samples, empirical study of CEO gender, age, education, and term limits back under a different background characteristics of the relationship between CEO pay and regulating over-investment. Finally, the use of statistical software stata12.0three models of multiple regression analysis conducted on the hypotheses and draw conclusions.The study found:(1) regression coefficient CEO pay and excessive investment is significantly negative, which means that CEO pay can suppress excessive investment.(2) CEO gender and CEO compensation there is no significant correlation; CEO age and CEO compensation inverted U-shaped relationship; CEO qualifications and CEO pay significant positive correlation; CEO tenure and CEO pay significant positive correlation.(3) CEO pay for sex does not affect the inhibitory effect of over-investment; increases CEO age, CEO pay and excessive investment in an inverted U-shaped relationship; higher education CEO, CEO salaries overinvestment inhibition greater; with increasing duration of CEO tenure, CEO salaries inhibition of over-investment will diminish. The paper concludes with some inspiration value in doing research investments when the CEO and other managers must heterogeneity into account. In addition, this article will help us gain a deeper understanding of the company’s investment behavior and incentive compensation effect, but also has a certain reference value for the selection of the board of directors of listed companies CEO and other senior managers. |
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