Management Power,Internal Control And Executive' Private Benefits

Based on the agency theory,the research on executive compensation incentive is always carried out under the optimal contract theory.However,the design of executive compensation is often deviated from the traditional theoretical model,since the global financial crisis,emerge in an endless stream executive remuneration of executives of listed companies to obtain "salary","zero pay" and "excess perks" private benefits phenomenon coexist,and even appeared in the executive compensation the growth rate is higher than the profit growth rate,salary growth and profit is negative growth situation upside down.With the continuous development of economy and society,the optimal contract theory exposes its shortcomings,the existence of management power makes executives have the ability to use their own unique information and power to gain private interests.At the same time,since the promulgation of the SOX act,the importance of internal control has been paid more and more attention by enterprises all over the world,the promulgation of "the basic norms of enterprise internal control supporting guidelines" and the relevant guidelines indicates that the internal control standard system has been basically formed by integrating the international advanced experience and adapting to the actual situation of our country.Therefore,it is worthwhile to study whether the effective internal control can restrain the executive' private benefits caused by management power.In this paper,we study the relationship between internal control,management power and executive' private benefits in Shanghai and Shenzhen A-share listed companies in 2009-2015.The empirical results show that:(1)the greater the managerial power is,the higher the executive' private benefits is,and compared with the non-state-owned enterprises,the positive correlation of the state-owned enterprises between the managerial power and the executives' private benefits is more obvious.(2)Internal control can weaken the acquisition of executive' private benefits,and the improvement of the effectiveness of internal control can weaken the private benefits caused by management power.At the same time,compared with the non-state-owned enterprises,the internal control of state-owned enterprises plays a more and more important role in restraining the executive' private benefits.