Research On The Influence Of Tunneling Behavior Of Large Shareholders On Executive Payment-Performance Sensitivity Based On Property Rights Structure

At present,with the growing scale of listed companies,the principal-agent problem is particularly prominent.The traditional approach is through reasonable design of salary system to relieve the problem that interests of executives and shareholders are not consistent.As a result,most domestic public companies try to design the executive compensation system linking to the performance to alleviate the contradictions.However,in recent years due to the equity of many companies in our country relatively concentrated,making the serious phenomenon of separation between the ownership and cash flow rights of the listed company,thus appearing the unequal phenomena of ownership and control,when the company gains more than the cost,there will be the new agency problems producing through the tunneling behavior of the big shareholders which encroaches on the company property and the interests of minority shareholders.This agency problem deviates from the goal of maximizing the wealth of shareholders,reduces the company's performance,damages the interests of the executive whose compensation is closely related to performance.In order to maintain their own interests,senior executives and major shareholders carry on the dynamic game,however,the consensus that they eventually tend to destroy the framework of executive compensation system,that is reducing the sensitivity of the executive compensation to the company's performance.This phenomenon also provided resistance to the orderly development of capital market.Therefore,in order to effectively solve the negative influence of the tunneling behavior,this article will try to conduct the empirical research for the impact of big shareholders' tunneling behavior to the design of the executive compensation system,and to put forward some reasonable suggestions to improve this situation.The thinking of writing of this paper is: first of all,through the summary and tandem of the theoretical basis of predecessors and theoretically analyzing the way and degree of the impact which produces from large shareholders tunneling behavior on executive compensation system,then,collecting data,conducting the empirical test,we verified the big shareholders tunneling behavior' influence on executive pay-performance sensitivity.And we has carried on the further research,in the firms which owns different ownership concentration in accordance with division of the different first big shareholder shareholding,and verified that in the company with different ownership concentration,largest shareholder tunneling behavior has a different influence degree to the executive pay-performance susceptibility.At the same time,according to the property of the different nature,distinguishing the companies between state-owned enterprises(including the central state-owned enterprises and local state-owned enterprises)and non-state-owned enterprises,we analyzed the influence of tunneling behavior of major shareholders with characteristics of different property on executive pay-performance sensitivity,provided powerful basis for designing the executive compensation system of enterprises with different property rights.Eventually we came to the conclusion,and according to the empirical conclusions,put forward the effective policy recommendations to prevent big shareholders' tunneling behavior,promoted executive pay-performance sensitivity,at the same time,analyzed the deficiency of this article.The contribution of this paper are mainly as follows:Firstly,this paper studies the sensitivity of the executive compensation to performance,defines a variable and derives its rationality from the logic,and then using the executive pay-performance sensitivity as the dependent variable,considers the influence of large shareholders' tunneling behavior.We also distinguish the different ownership of the first big shareholder and discuss the tunneling behavior's influence of different level on executive pay-performance sensitivity.Secondly,we combine the special political and economic background in China,distinguish state-owned enterprises and non-state-owned enterprises according to the different nature of the property rights,research enterprises with different nature of property rights.After considering different factors such as the motive of large shareholders' tunneling behavior,bargaining power of the senior managers,and so on,we research the different effect of large shareholders' tunneling behavior on executive pay-performance sensitivity.Thirdly,when considering large shareholders and pay-performance sensitivity,we introduce the game model,dynamically analysis the cause of correlation and the changes between the both.