The Influence Research Of Institutional Investors On Executive Pay Performance Sensitivity

In the modern joint-stock company,in order to manage the company better,the company's owner had to hire a professional manager to manage,which will inevitably bring about the separation of ownership and management of the company.Due to conflicting interests of both sides,it causes the principal-agent problem.In the corporate governance research,management incentives and shareholder oversight are two important ways to solve the principal-agent problem,and there is a certain alternative relationship between them,but there is seldom an independent,strong oversight capabilities shareholders.The rapidly developed institutional investors can play a good principal role.In recent years,China's capital market has formed a pattern of a variety of institutional investors development together.Meanwhile,China promulgated a series of laws and regulations related to develop the institutional investors,relevant legislation improved gradually,these provides an important guarantee for the institutional investors to participate,as an important part of corporate governance,compensation mechanism will have been focused on by the institutional investors.In this institutional context,researching their relationship will have a certain significance.First of all,it not only enriches the research aspects about executive pay performance sensitivity,but also expands the research of institutional investors'corporate governance role.Secondly,it provides practical reference for China's institutional investors to further develop.Thirdly,it can help seek ways to improve China's listed companies executive compensation incentive system.Finally,this topic can help people understand the factors affecting the contract and improve them.This article consists of six parts:The first part is an introduction.This section mainly describes the motivation and significance of the research,and then introduces the content and methods.Finally,it summarizes the innovation of this paper.The second part is the literature review.On the basis of three aspects of the literature review at home and abroad,which includes executive pay and company performance,institutional investors and corporate governance,institutional investors and executive pay performance sensitivity,it is concluded literature review and implications of this article.The third part is the theoretical analysis and research hypothesis.First,it defines the concept.Secondly,it introduces the theoretical basis of institutional investors' impact on the executive pay performance sensitivity from the principal-agent theory,asymmetric information theory and incentive theory in three aspects.Thirdly,on the basis of theoretical analysis it analyses the cause and action mode of the impact.Finally,based on theoretical analysis,this paper proposes four hypotheses.The fourth part is the research design.This section describes model,sample selection and data sources about the institutional investors' effect on executive pay performance sensitivity,and then introduces the independent variable,the dependent variable and the control variable's selection and design.The fifth part is empirical analysis.On the basis of the general and sub-samples of the descriptive statistics,it makes correlation test of the main variables and makes the multiple regression analysis from the overall,different types and different types under the property rights.The sixth part is conclusions and recommendations.This article summarizes the findings from the regression analysis,and then puts forward the relevant recommendations.In this paper,empirical results show that:(1)overall institutional investor ownership and executive compensation performance sensitivity are positively correlated,meaning that the higher the overall proportion of institutional investors holding,the stronger executive pay performance sensitivity.(2)There is a positively relationship between pressure-resistant institutional investor and executive compensation performance sensitivity.(3)There is no significant relationship for pressure-sensitive institutional investor.(4)Compared with the state-owned enterprises,the relationship is more significant between pressure-resistant institutional investors and executive pay performance sensitivity on-state enterprises in the non-SOEs;there is no relationship between pressure-sensitive institutional investors and executive pay performance sensitivity in the SOEs and non-SOEs.This innovation includes three aspects:(1)this paper distinguishes the effects of different types of institutional investors on executive pay performance sensitivity.Due to their different investment objectives,corporate governance effect of different types of institutional investors are different,not all institutional investors oversee company,if only from the perspective of the overall,study findings will be biased,so this article studies its effect on corporate governance from the whole and different types of institutional investors view.(2)Based on the classification of institutional investors and distinguishing between different property types of enterprises,the paper makes a comparative study in listed companies,and analyses the influence of institutional investors on executive pay performance sensitivity in different ownership,which is more specifically,more targeted.