Research Of The Relationship Between Top Manager Compensation And Corporate Social Responsibility:Regulation Effect Of The Internal Control

With the sustainable and stable development of national economy,corporate social responsibility is getting more and more important as people give a higher request to the quality of life,improvement of living environment and security of food.Corporate social responsibility increases the cost and impacts the short-term financial performance.Thus,top managers have an incentive to reduce corporate social responsibility for their self-interest.Compensation management plays incentive effect on human resource management,and acts as the guide in the behaviors and strategic decisions of the top managers.It is a new research direction that studies the incentive effect of top manager compensation on social responsibility by combining the top management incentive and enterprise strategic behaviors.Many researchers had explained the relationship between top manager compensation and corporate financial performance.But it is subject to myopic view and self-interest of top managers when considered the compensation management just in the terms of finauce.It benefits the long-term development of enterprises as the compensation system becomes much more reasonable and effective,when corporate social responsibility is brought into consideration in compensation management.The management compensation includes short-term financial compensation and long-term shareholding compensation.This classification is convenient for the study of the function of management compensation.Recently,researchers had not play enough attention on the significant supervisory role of the internal control when analyzed the influence of top manager compensation on corporate social responsibility.This paper takes the internal control into consideration and enriches the theoretical study of corporate social responsibility.This study validates the hypotheses using regression analysis based on the sample data of a-share listed companies.It shows a significant positive correlation between the short-term financial compensation and corporate social responsibility.It also shows a significant positive correlation between long-term shareholding compensation and corporate social responsibility.The internal control has a promotion on the above two positive correlations.The higher the top manager compensation,either the short-term financial compensation or long-term shareholding compensation,has positive effect on the corporate social responsibility.A fine internal control benefits the incentive effect of compensation.In conclusion,it proposes that the compensation incentive system should be perfected both in the short-term financial compensation and long-term shareholding compensation,the internal control should be improved to prove the supervision and incentive effect.