Market Process、debt Financing And Executive Excess Pay

In the process of governance,the company’s ownership and management are separated,the company is actually controlled by the managers,executives may harm the interests of the shareholders for their own interests,which causes the problem of agency executives and shareholders.The salary contract established by the company is to solve this problem.In 2008,China’s safe’s"astronomical" executive pay has been exposed,In 2011,the US "Wall Street"event has occurred because of the high executive compensation caused by the protests,public attention has focused on high executive pay,In 2014,China is also introduced policy on the executive’s excess pay to suppress,But in March,2017,the latest annual data of 600837.SH showed that Hai tong’s profits had fallen by about half in the past year,while executives had doubled their salaries.Executives through their own power to make excessive compensation,on the one hand,if there is no external mechanism of supervision,the restraint of executives to gain power will be larger,even to make compensation contract of the board of directors of manipulation,so that their salary is extremely high.On the other hand,if the executives has bigger powers,they will produce more financial fraud,earnings manipulation,on-the-job consumption,and challenge the company’s internal system.What is more serious is that the high salary will increase the gap between the rich and the poor,arouse greater social concern and intensify social contradictions.As an independent economic person,creditors are independent of shareholders and executives,so debt financing can be used as an external mechanism to supervise executives.On the one hand,debt servicing will restrain executives’ pay for excess consumption,on the other hand,there is a conflict of creditors and the interests of executives,the creditors in the formulation of the contract to add some restrictions,such as limits on executive excess compensation,restrictions on investment behavior,executives have to make compromises in order to get the loan.Bound by their own selfish behavior,reduce the excess compensation.In addition,the existing research shows that there are great differences in the process of marketization in various regions of China,and will probably have an impact on debt financing,which will have an impact on excess compensation.Therefore,this paper starts with debt financing,controls other factors that affect executive excess pay,and studies the impact of loan size and loan term constraints on executive excess compensation.The results of this study show that the size of bank borrowings and executive excess compensation is negative correlation;the proportion of short-term borrowing is bigger,more executives can inhibit the excess compensation;the level of the market is high,inhibition of borrowing of executive excess compensation is more obvious;the market level is high,inhibition of short-term borrowing of executive excess compensation is more obvious.Based on the panel data of China Shanghai and Shenzhen A shares of listed companies have the basis of considering the marketization process of the current situation of our country,using the method of empirical research combined with empirical research on debt financing,analyzed the influence on executive compensation in excess,the article is divided into the following six main parts:The first part is introduction.This paper introduces the background,the significance of the topic,and explains the research methods and ideas,innovations and shortcomings.The second part is literature review.For the executives of excess compensation,debt financing governance and market impact on the debt financing related research are described.The research status of related fields in order to have a clear understanding,to explore the research.The third part is theoretical foundation,concept definition.First describe the theory of debt financing governance and executive compensation in excess of the agent cost theory and corporate governance theory,managerial compensation theory three aspects,and then define the concept of finance executives,executive compensation,executive compensation and the excess debt marketization process.The fourth part is empirical research design.According to the relevant theory,the assumption is that the dependent variables,independent variables,control variables,etc.,to construct the model of the research questions.The fifth part is empirical analysis.Use Excel13 and statal3 software to organize,process and analyze the data.Descriptive statistics and multiple regression analysis are used to analyze the empirical results.Finally,the robustness test uses the variable total executive compensation to make the empirical results more reliable.The sixth part is conclusion and suggestion.This part carries on the research and the analysis through the preceding research result,and proposes the corresponding policy suggestion according to the research result.The main innovations of this paper are as follows:(1)Enrich the relevant literature on the governance role of debt financing.The governance role of debt financing is applied to solve the problem of executive excess compensation.(2)Enrich the research of executive excess compensation.This paper combines executive excess compensation with debt governance to enrich existing research.(3)Enriched the study of debt governance environment.Marketization is our ultimate goal,and marketization provides a freer environment for debt financing.