Study On Collective Self-insterest Of Company Executives

Executive compensation has been an important part of corporate administration.In recent years,the phenomenon of excessive executive compensation is increasingly serious and the executive compensation in China appears a faster growth rate,which influences the interests of shareholders and enterprise development.When the economic crisis came,the phenomenon of too much executive compensation didn't weakened but became more prominent because of the recession,which caused the attention of a number of scholars at home and abroad.According to the theory of commissioned agency,the agency costs of executive agents are regulated by the effective compensation contracts,and the contradiction coordinated the interests and contradictions between clients and agents.The optimal contract theory provides another kind of explanation for the regulation of executive compensation.Subsequently,the management power theory,explained the use of executives' own power to achieve the purpose of self-pay,resulting in self-interest behavior of executives.According to the theory of commissioned agency,"Managerial self-interest behavior" refers to the behavior that managers may improve their own interests at the expense of the interests of shareholders.As a special organization for the development of executive compensation system,the establishment of remuneration committee is an effective way to prevent the agents from invading clients' interests.The SFC stipulates that under the premise of more than two-thirds of the independent directors in the remuneration committee,if there are executives or other insiders in the remuneration committee the independent directors won't work.It will result in the inaction of remuneration committee and even the collective self-interest with executives.All of it will infringe the interests of the clients further.We build a function model combining the data of listed companies in China in 2010-2014.We can the paper constructs the function model.By examining the relationship between executive compensation and firm performance and expense gap between executives and employees,we can examine the self-interest of executive compensation.Using statistical software,the least squares regression of construction model is finished.And the Hausman test was used to determine the fixed effect model and the choice of the random effect model.We can test the collective self-interest behavior of senior executives through the compensation relationship of senior management compensation and remuneration committee members.The performance of the company based on the accounting net profit,the ROA total assets net profit rate and the ROE net asset profit margin are used for the robustness analysis,and the results are consistent with the whole sample empirical results.There is a big gap between executive compensation and employee compensation.There is a significant positive correlation between the remuneration of executive compensation and the remuneration of the remuneration committee members and the positive correlation between the remuneration of the executive compensation and the proportion of insiders within the remuneration committee.They indicate that there is self-interest behavior of executive compensation and there is the collective self-interest phenomenon.There is no significant correlation between executive compensation and corporate performance,and executive compensation is not linked to firm performance.On the contrary,there may be a phenomenon of pay and performance inversion.Based on the results of the study,the commission can provide standards for the development of remuneration from different industries,format the industry self-regulation and strengthen supervision between different industries by announcing the proportional coefficient of industry executives and staff salaries in order to avoid excessive pay executives and the establishment of a healthy remuneration mechanism.It can play an independent director role through the independent director remuneration norms.Also,it can enhance the staffs' supervision of the company's executives' remuneration by allowing the employee representative supervisor enter the remuneration committee so that it builds a collective self-interest of avoid ing the executive control system,and effectively control corporate executives collective self-interest behaviors.The interpretation of self-interest behavior of senior executives is helpful of reminding external stakeholders to supervise the executive compensation levels and the development of compensation schemes.At the same time,it will make the company's shareholders to optimize the corporate governance structure,improve the executive pay system,and strengthen supervision so as to ensure the fairness and rationality of compensation contracts and the effectiveness of incentives and curb the opportunistic behavior of insiders and senior management.