Research On The Influence Of Managerial Power And Institutional Investors On Executive Compensation After The Reform Of Non-tradable Shares

In recent years,the sky-high executives of listed companies have aroused widespread concern and heated debate in society.However,behind the phenomenon of the sky-high executives is the continuing decline of the company operating performance.Executive remuneration and corporate performance showed the "upside down" phenomenon,and the rationality and transparency of the extortionate price paid are increasingly questioned by small and medium investors.In order to effectively improve the effect of management compensation incentives,the introduction of external regulatory mechanisms is essential to regulate the normal exercise of executive power.The rapid development of institutional investors has improved their ability and discourse to participate in corporate governance,whether China's listed company executives exist self-interest behavior in the process of remuneration design? Whether institutional investors can play the role of independent major shareholders outside the company,and play a supervisory role for the self-serving behavior of managers? The answers to these questions are worth to be discussed and evaluated in the academic circles.Fair and efficient management pay incentive mechanism has an important role in solving the principal-agent problem.Under the background of deepening the reform of state-owned enterprises in China,it is of great significance to study the influence mechanism of the executive remuneration of listed companies,especially state-owned listed companies.In this paper,we take 1129 listed companies in Shanghai and Shenzhen A-shares as the research object,and deeply study the internal cause and effect relationship between executive power and executive remuneration,institutional investors and executive remuneration,the relationship between institutional investors and executive power remuneration.Based on the results of previous studies to further confirm(pseudo),we get more valuable research results.Firstly,the paper builds the comprehensive index of management power.The management authority is the most important explanatory variable in the research literature of the management power of the listed companies,but because of its own concealment,there is no suitable single index to measure the power of management level for a long time.This paper chooses 5 management power variables which are the mostly used in the existing literature,and use entropy method to construct the comprehensive index of management power for the first time,the results show that the managerial power index constructed by entropy method can measure the management power very well.Secondly,based on the management power comprehensive index,the influence of management power on the executive remuneration and executive remuneration sensitivity is studied in order to verify whether there is management control in the design process of executive remuneration in listed companies.Finally,this paper studies the effect of institutional investors on executive power remuneration,for the purpose of analyzing whether institutional ownership has an effective control of the management authority.Research results show:(1)Although China's listed company's executive pay-performance sensitivity is relatively low,it has been gradually established executive remuneration system based on the performance of the company.The sensitivity of executive remuneration performance is significantly positive.And it is found that the pay-performance sensitivity of state-owned enterprise executives is lower than that of non-state owned enterprise executives.(2)In the design process of the management remuneration contract of Listed Companies in our country,there is a widespread influence of management power,the greater the power,the higher the salary of management.At the same time,it is found that the power remuneration of state-owned enterprise executives is lower than that of the executive power of non-state owned enterprises.(3)The sensitivity of executive remuneration performance is asymmetric,and the sensitivity of executive remuneration to earnings performance is significantly higher than that of loss performance.The management of power will not only affect the remuneration of executives of listed companies but also affect the sensitivity of executive remuneration performance.And power management will improve the sensitivity of their salary on the earnings performance,reduce the sensitivity and loss performance.(4)Institutional investor shareholding not only improved the pay of executives of listed companies but also increased the sensitivity of the performance of listed company executives.(5)Institutional investors effectively limit the Institutional investors to reap high power remuneration for management of the conduct of the effective containment,effectively reduced management power remuneration by supervising the management power.Therefore,the strategic role of the introduction of institutional investors to improve the governance of listed companies is positive and effective.The main innovation of this paper lies in,For the first time,the entropy weight method is used to construct the comprehensive index of management power.For the first time,dynamic panel model is used to describe the dynamic behavior of executive remuneration.A new perspective on the effectiveness of institutional investors through influencing the executive power remuneration to improve the management salary incentive.The research results have important theoretical and practical significance to improve the governance capability of Listed Companies in our country and effectively play the role of institutional investors in corporate governance.