Environment System,Executive Compensation Incentive And Investment Efficiency

In recent years,with the continuous expansion of the company’s investment scale and increasing investment income,the proportion of investment activities in corporate financial activities has increased year by year,and the importance of investment decisions in financial decisions has become increasingly prominent.In such a company context,management should always pay close attention to changes in the company’s investment decisions,carefully make investment decisions,and select appropriate investment projects to achieve high investment efficiency.However,based on the analysis of existing theories,due to the existence of principal-agent conflicts and information asymmetry,management often adopts irrational investment decisions in the process of investment decisions: on the one hand,investing cash flows in projects with negative net income.Investment that causes excessive investment,but on the other hand it reduces investment in projects with positive net income causes underinvestment.No matter what kind of investment issues,it may make the company’s free cash flow difficult to be effectively used,resulting in the ineffectiveness of financial activities,which is not conducive to the improvement of the company’s performance.On the contrary,high-efficiency investment activities can realize the optimal allocation of funds,lay a solid foundation for the company’s operations,and enhance the company’s value.Therefore,studying how to improve investment efficiency has become the focus of academic research.As a good mechanism to solve the issues of entrusted agency and information asymmetry,the compensation incentive mechanism can ease the contradiction between shareholders and management and reduce the cost of supervision and restriction.It provides executives with monetary compensation to meet their requirements for pursuing personal gains and making up for personal costs.It encourages them to timely weigh the pros and cons of investment decisions and make sound investment decisions.However,it is worth noting that the compensationincentive system lacks a strong governance effect in the company structure in China.This may be due to the short development time of China’s capital market,the incompleteness of relevant laws and regulations,and the lack of effective compensation incentives.According to the research of the existing literatures,the common incentive method of the compensation incentive system is the monetary compensation level,and a higher level of monetary compensation can play an effective incentive role.Relatively speaking,the monetary compensation gap is a unique compensation method in the compensation system.The incentive effects that are played are less valued.Based on this,this paper has a strong theoretical significance to deeply study the effect of executive compensation incentive mechanism on investment efficiency.At the same time,as China is in a special period of market economy transition,it is undergoing a transition from an extensive economic model to an intensive economic model.The region has different resources and regulations and policies,so that the incentive mechanism played by the compensation mechanism in different institutional environments will There is a bias,which also means that the institutional environment will have an impact on the relationship between executive compensation incentives and investment efficiency.Therefore,the paper empirically examines the relationship between the two in relation to the market environment.This paper adopts a combination of theoretical and empirical methods to systematically review the theoretical literature on the institutional environment,executive compensation incentives,and investment efficiency,and combines information asymmetry theory,principal-agent theory,and championship theories to take into account the Shanghai and Shenzhen markets in 2012-2016.A-share listed companies are sample data,empirically testing the relationship between institutional environment,executive compensation incentives and investment efficiency.The main conclusions are as follows: improvement of institutional environment can effectively improve investment efficiency;currency compensation levels,currency compensationand unexpected Both compensation and investment efficiency are positively correlated,indicating that the increase in monetary compensation can promote investment efficiency;in terms of monetary compensation structure,both internal and external pay gaps are positively correlated with investment efficiency,indicating that the widening of the monetary pay gap can achieve high investment efficiency..After further examination,it was found that in the relationship affecting investment efficiency,the institutional environment and the internal pay gap,the institutional environment,and the external pay gap are all significant alternatives,especially after distinguishing the nature of the stock rights.These two alternative relationships are non-state-owned.Listed companies are more prominent.At the same time,by substituting the correlation variable test and retesting the model data after special treatment,it is concluded that the research conclusion of this paper is robust.Finally,on the basis of summarizing related research results,this article based on the results of theoretical analysis and empirical test,combined with the company’s actual status,proposed from the perspective of corporate governance structure: to strengthen the company’s external market environment construction,give full play to the institutional environment for investment efficiency The role of governance;companies need to design a scientific and reasonable executive compensation contract,and continue to improve the governance structure of compensation incentives,so that the effect of long-term monetary incentives to pay;through the expansion of executive currency wage gap to play the role of salary incentives,prompting executives Maintain a good atmosphere of mutual supervision and competition;in the process of improving the external institutional environment governance function,strengthen the link between the company’s internal incentive mechanism and the institutional environment,give full play to the institutional environment and salary gap incentives in the investment efficiency Impact role;Improve the remuneration disclosure system of listed company executives,so that the disclosure of more rewardincentives can follow the procedures of system management and detailed calculations,thereby increasing the transparency of remuneration information.