Research On Relevance About The Executive Compensation Structure And The Compensation Sticky Based On Managerial Power

Executive compensation has always been the highlight in the research of corporate governance.It is particularly important of the effectiveness of the compensation contracts and how to maximize utility by designing structure of executive compensation.In recent years,enterprise management faces greater uncertainty under the new normal economy,so monetary compensation based on the standard of compensation contracts is very unstable and executive needs to bear too much risk compensation.Under the condition of incomplete contracts,executive make a large application of on-the-job consumption in order to keep the benefit maximization.At the same time,executive with managerial power chooses best forms of compensation so as to influence the design of pay structure.The results of the above actions caused sticky.The existence of the executive compensation sticky means that the risk needed to bear and the future gains doesn't mach.This phenomenon,which does not conform to rational pricing mechanism of managers under the condition of market economy,will cause an adverse impact on the enterprise.Therefore,it is necessary making a research on the relationship between the executive compensation structure and compensation sticky to reduce the characteristic of sticky.According to the study of the past and the principal agent theory,the management theory of power,incentive theory,attribution theory etc,this paper has a research on compensation structure in the view of compensation sticky,performance sensitivity and tests the interaction impact of executive compensation structure and managerial power on compensation sticky under the perspective of special economic background of our country.The paper chooses data which are selected from listed company in 2010-2014,so as to provide further empirical evidence and support for standardizing and perfecting executive compensation incentive mechanism of Chinese listed companies.Empirical studies have found that there are general rigidity characteristics of executive compensation,named Compensation Sticky,and this characteristic is more serious in state-owned enterprises;the rule of on-the-job consumption is obvious in pay structure.The results show that the proportion of on-the-job consumption in compensation structure significantly worsened the performance of state-owned enterprises,whereas maybe because of the tax-saving objective,a contrary trend was observed in private enterprises.Meanwhile,the substitution effect of on-the-job consumption to monetary compensation will negatively influence corporation performance in general.Further study shows that the substation effect of on-the-job consumption is stronger to monetary compensation,which means there is more compensation sticky when the manager has much more power.This paper will provide the empirical and practice evidence for corporation to establish a reasonable incentive mechanism and implement dynamic arrangement about executive income distribution system.Therefore,enterprises try to implement pricing of executive pay in line with market and give full consideration to various incentives,improve the internal governance mechanism and give the privilege of non-controlling shareholders more governance.At the same time,forming a more reasonable system of information disclosure reduces the information uncertainty and increases public scrutiny.