Study On The Stickiness Of Executive Compensation In Transportation Industry From The Perspective Of Corporate Governance

With the deepening of salary system reform, compensation incentive is not only an important form of enterprise incentive of senior management personnel, but also becomes an important research topic in the field of modern enterprise management which receives more and more attention from academic community. Currently, with the pay system of public company performance gradually carried out in our country and market governance mechanism gradually established, the relations between executive pay levels and corporate performance become more closely. However, it does not mean that compensation and performance change by the same proportion. In recent years, executive compensation has presented a new feature of the asymmetry of pay performance sensitivity, which is called executive compensation sticky phenomenon. The viscous characteristic of such remuneration is actually a principal-agent problem, and it is the results of executives using their power for self-interest behavior. Fundamentally, this phenomenon is actually a principal-agent problem, and it is the result of executives' self-interest behaviors, which depends on their power. It also reflects the Chinese modern corporate system enterprise governance mechanism does exist some defects.From the perspective of corporate governance, this paper selects companies of transportation industry from Shanghai and Shenzhen public companies between 2010 and 2014 as research samples, uses the empirical study to comprehensively examine the existence of executives' compensation stickiness in transportation industry, and further investigate the regulating effects of the corporate governance mechanism on the relationship. The final result shows that:(1) There is an significant asymmetry between executive compensation and corporate performance in China's transportation industry, namely the existence of executive compensation sticky.(2) According to empirical tests, the regulating effect of corporate governance mechanism on the relationship between executive compensation and corporate performance, this paper finds that the larger board size and two part-time of the chairman and general manager have significantly increased the possibility of the stickiness of executive compensation. However, the independence of board of directors and high ownership concentration both have inhibiting effect on the stickiness of executive compensation. But the results are not significant.On the basis of the conclusions,this paper selects Air China as a typical one of public corporation of transportation industry, and has a detailed analysis on Air China's compensation stickiness of existence, and further analyses the problems of the corporate governance mechanism to clarify the relationship between them, which aims to regulate the effects of the corporate governance mechanism. At last, this paper imposes a series of measures which includes the aspects of appropriately controlling the board size, enhancing the independence of the independent director, adjusting the ownership structure and regularizing the performance evaluation system in order to optimize the corporate governance structure and realize the effectiveness of executive compensation incentive.