Empirical Research On Nature Of Property Right,Profit And Loss From Fair Value Changes And Executive Compensation

The separation of ownership and management rights in modern enterprise leads to principal-agent problem,reasonable and effective executive compensation contract is crucial to coordinate the interests between the two sides and reduce the agency cost.With the further development of financial market and the complexity of financial instruments,the company's performance which is measured by historical cost has been unable to accurately measure the financial situation and operating results of an enterprise,so the executive compensation contract on the basis of the company's performance also need to develop dynamic adjustment.The implementation of fair value measurement standards provides a practical base for improving executive compensation contract.In fact,executive compensation problem is equal to the principal-agent problem,and the principal-agent problem is equal to the problem of property right in Chinese economy environment.The decision function of the executive compensation changes with the different property right relationship.As the market economic system reforming gradually,China has become to be mixed economy system which is dominated by state-owned enterprises and supported by non-state-owned enterprises.At the same time,the ownership structure tend to be more diversified.It means that the research on executive compensation problem in China cannot leave the nature of property right,or it is difficult to form a scientific conclusion.Learning from the research achievements of previous scholars,this paper analyze the relationship between fair value changes and executive compensation by using a sample of all A-share listed companies from 2011 to 2015.Considering the national conditions and the unique economic background in China,this paper distinguish the nature of the property and make a comparative analysis.The study finds that : Profit and loss from fair value changes has a significantly positive influence on executive compensation in whole samples,changes in fair value has no significantly impact on executive compensation in state-owned enterprises.However,profit and loss from fair value changes has significant positive influence on executive compensation in non-state enterprises.