Research On The Impact Of Executive Pay Gap On Budget Slack

As an effective management method in the process of enterprise management,budget management has been paid more and more attention both in practice and in theory.The research on budget slack has been an important focus in the field of budget management.The foreign scholars had started the research on budget slack,and analyzes the causes of budgetary slack;while Chinese scholars research on budget slack is late,but rarely from the perspective of information asymmetry on the executive compensation gap on the impact of budgetary slack.According to the principal-agent theory,the budget slack is a kind of interest game between the upper and lower managers in the budget preparation because of the information asymmetry between the upper and lower agents.As the agent of an enterprise,the senior managers have an important influence on the information asymmetry.And executive compensation will have an important impact on the behavior of executives.Reasonable executive compensation gap can motivate executives to work hard,reduce the information asymmetry between the upper and lower levels,and reduce the occurrence of budget slack.Therefore,it is necessary to study the executive compensation gap in order to reduce the level of budget slack.However,whether the executive compensation gap can really motivate executives,reduce information asymmetry,and reduce the occurrence of budget slack?And whether the incentive effect is different in state-owned enterprises and non-state-owned enterprises?These problems are worth studying,it is very important to find out these problems to optimize the budget management of the enterprise and make it better use of the comprehensive budget management.This paper is divided into five parts.The first part is introduction,research significance and introduces the research background,research methods and research ideas,research innovation and characteristics,reviews the influential factors of corporate budget slack and executive pay gap incentive effect of domestic and foreign literature.The second part is the theoretical basis of this paper,which defines the relevant concepts of the research object and expounds the theory foundation of the principal-agent theory,behavior theory and tournament theory.The third part is the theoretical analysis and the research hypothesis.It describes the executive pay gap and the budget slackness of the manufacturing listed companies in China,and discusses the mechanism of the executive pay gap on corporate budget slack and puts forward the Of the study hypothesis.The fourth part is the empirical test.In this paper,608 observations of Shanghai and Shenzhen A-share listed companies in 2013-2015 are selected as the research samples.The multiple regression and Logistics regression methods are used to test the hypotheses.The fifth part is the research conclusions and policy recommendations,the study found that:(1)the executive compensation gap and budget slack were significantly negatively correlated,indicating the executive compensation gap between enterprises can reduce the level of budgetary slack;(2)compared with the state-owned enterprises,corporate executive pay gap can significantly reduce the level of budget slack in non state owned enterprises.This paper studies the characteristic and innovation lies in the premise of budget slack factors systematically the basic theory,combined with the status quo of China's enterprises,the main reason deeply the budget slack generated by the enterprise,expand the scope of budgetary slack.At the same time,the enterprise budget slack factors into the budget system of internal factors and external factors of budget system of two parts,and sum up the external factor for several environmental uncertainty and information asymmetry,executive compensation gap and innovation of the research perspective of budgetary slack.At present,there are few literatures on the study of the influence of executive compensation gap on budgetary slack,and using the latest data of Listed Companies in China,this paper makes an empirical analysis.In this paper,it is a new exploration of the research field to conduct a normative and Empirical Study on the impact of executive compensation gap as the influencing factors of corporate budget slack.