Managerial Power, Negative Media Coverage And Executive Compensation

In recent years, executive compensation has been reported frequently by domestic and international media. During the financial crisis, some listed companies in the United States accept the government’s bailout, but their executives still enjoy astronomical salaries. A similar phenomenon in China also attracts the domestic media. The public pay attention to the reports on the executive compensation from hundreds of listed companies, which becomes a hot topic in society. Our government also attaches great importance to the issue of how to monitor executive pay effectively, and issues a series of related guidance. In this process, the media will undoubtedly play a key role. Based on the relationship between the executive power and executive compensation, this paper further explores that as an external governance of listed companies, how the negative media coverage play a part in supervision and management mechanism.Through theoretical analysis and empirical test, the main conclusions are as follows:(1) executive can decide salary by control. (2) negative media coverage play a role in regulating the negative effects in the relationship between executive power and executive pay. (3) negative media coverage plays different roles in different listed companies, which are embodied in:with respect to monopoly industries listed companies, the regulate effect in non-monopolistic industries listed companies is more significant; with respect to large-scale listed companies, the regulate effect in small-scale listed companies is more significant; with respect to the central and western listed companies, the regulate effect in listed companies from eastern regions is more significant; however, this difference was not reflected between the state-owned and non-state-owned listed companies.