An Empirical Study On The Relevance Of Media Monitoring And Sticky Perks From Listed Companies In China

In recent years, the phenomenon which the executives of listed companies in our country have astronomical salaries and astronomical perks occurred frequently, and it has caused extensive concern of media and the public. Perks are indirect monetary gains the executives acquired which are relevant or irrelevant to their duties and responsibilities during their performance. Perks include enjoying luxurious office, owning club membership, flying first class, having a special plane or car, and dining entertainment consumption, etc. Proper perks can incentive the executives, improve enterprises’efficiency, alleviate the problem of agency for monetary compensation and save cost indirectly. However, excessive perks will damage the benefits of the enterprise and the owners, moreover, leading to executives’violations or market disorder. The objective functions of owners and executives vary in state-owned enterprises and non-state-owned enterprises, and perks play a different role in enterprises with different property right. Separation of enterprises’ ownership and management right is the foundation of modern enterprise system, the enterprises’management right has been greatly delivered into the professional managers. In principal-agent relations, information asymmetry and opportunism exist. Bailers should make agents to serve their own interests through an incentive and constraint mechanism since agents will not always act in accordance with the principle of bailers’interests. As a result, executives will adjust their compensations and resources they can control to save their own interests from the damage of fluctuations of enterprises’economic activities.. And the compensation and perks present asymmetric changes when the corporate performance changes. Does the stickiness of perks exist? Does the level of perks’ stickiness vary under different property rights? In addition to the corporate’internal governance, can external supervision play an effective part in perks? Will media supervision affect the stickiness of the perks under different property rights? These problems are worthy of our attention and research. This paper have studied the existence of the perks stickiness and the influence of media supervision for the perks stickiness using the method of theory and empirical combination from the perspective of different property rights.This paper mainly includes six parts. The first part is introduction. The second part is the literature review. The third part is theoretical analysis and hypothesis. Firstly, the part defined executives, perks stickiness, and media supervision. Secondly, it systematically expounded the principal-agent theory, the theory of information costs, governance theory and executive compensation theory. Finally, it put forward in the assumptions of the existence of the perks stickiness and the influence of the media supervision for the perks stickiness on the basis of theories. The fourth part is the research design. This part introduced all the variances and two main models used in the regression. The fifth part is the empirical analysis. This part carried on regression analysis using STATA.11 software. The sixth is divided into research conclusions and policy recommendations.Innovation of this article is mainly in the following three aspects. First, the research object is novel. The paper applies the method of combining theory and empirical analysis to verify the existence of the perks’stickiness. Second, according to the actual control of listed companies, the paper distinguish the nature of property rights, respectively study the existence of the perks’stickiness of the state-owned and non-state-owned listed companies. Third, this article adopts a new research angle, from the media supervision perspective.Main conclusions drew from the research are as followed:(1) Perks stickness exists in both state-owned and non-state-owned enterprises. The level of stickness is higher in state-owned enterprises. (2) Media supervision is effective in reducing the level of perks stickness. It is more significant in state-owned enterprises.This paper has some deficiencies:(1) Selections of variables involved in subjective judgments which may lead to measurement error. (2) Perks are not revealed compulsively by laws which may lead to a lack of enthusiasm for enterprises to disclosure.