Executive Compensation Gap,earnings Management And Firm Performance

With Ping An of China "executives with extremely high payments" event arising, "extremely high price " events frequently touched the public sensitive nerve, the public on executive compensation question sound has intensified, and emotionally believe that currently our country state-owned executive payment is extremely high, rapid growth rate,off-operating performance serious, beyond the public expectations and needs to be cut rectification and adjustment. Currently, pushing forward China executives of state-owned enterprises salary system reform is carried out step by step, compensation contract design which cannot be avoided in the reform is also subject to people’s attention.As the content of compensation incentive contracts, compensation gap is discussed more in academic circles because of its dual problem relating to equity and efficiency. A lot of researches have deeply researched on the performance related pay gap, and format two mature theory in this system: tournament theory and behavior theory. Under the support of the two theory, scholars have used empirical data to do the empirical test, but they are unable to agree on which one is right. some results demonstrate the applicability of the tournament theory, some results are consistent with the behavior theory hypothesis, and some studies show good complementary on tournament theory and behavior theory in explaining the relation between the issue of performance and compensation gap.In the literature, the author found that in the past on the pay gap in the analysis of the effect of enterprise performance, mostly indicators related to accounting performance directly measure corporate performance, and for executives the studies of the influence of whether other media prompted the pay gap on the performance of the enterprise are less involved. Just imagine that is it possible the expansion of the pay gap is likely to undermine the fairness of the operator to a certain extent, so that it is to seek personal interests to manipulate earnings to bring "noise" to the performance of the enterprise? So in the study of executive pay gap on the impact of corporate performance we can’t only consider contains strong "noise" enterprise accounting performance, but should investigate the influence on the enterprise performance excluding manipulation of executive pay gap.Starting from this point of view, the paper take data between 2000-2014 five years of state-owned enterprise holding listed companies as the research sample, on executive pay gap, relationship between earnings management and corporate performance were empirical research. Using the method of panel data analysis, descriptive statistics and regression analysis were used to analyze the sample data. It can be drawn through empirical test that,in the state-owned enterprise of our country, the gap between executive compensation and earnings management of the performance of a significant performs positive correlation;executive pay gap and the adjustment of earnings management of enterprise performance significantly shows positive correlation to verify the applicability of tournament theory in China’s state-owned enterprises; Executive pay gap and financial reporting accounting performance is also significantly positive correlation, and by contrast, we found that the expansion of the pay gap on the performance of the incentive effect is greater than the results of its earnings to manipulate the "noise".