Marketing Process,the Independence Of Compensation Committees And Compensation Stickiness

The Optical Contrast Theory believes that the executive compensation contrast could be a good way to solve principal-agent problem.However,executive pay chaos began to appear from years ago in domestic listed companies.Although some listed companies,performance have drop sharply,their executives' pay still in a high level.So that we can often hear news reports about executives' sky-price annual salary and many people challenge the rationality of high pay.Possessing natural advantages of information and power,many executives can determine their own pay.Many papers have been proved that listed enterprises in China have established performance-oriented salary system,but those unusual phenomena seem to indicate the compensation contrast is not totally effective.What's more,to the corporate governance mechanism,these phenomena also mean challenges.The board of directors consists of Compensation Committees to formulate the senior executive compensation plans and rationale.Obviously,to Compensation Committees,independence is an essential spirit.So we are curious about if Compensation Committees can keep independent as required and have improved the effectiveness of manager compensation contrast.This research is committed to solve all those problems.This article uses the non-state owned listed enterprises from 2009-2016 as inspection object,establishing fixed-effect models and taking the ratio of managers who hold a concurrent post of being a member of the Compensation Committees as substitution variable of independence to explore how the independence of Compensation Committees influence the effectiveness of manager compensation contrast and whether marketing process can influence the relationship between the independence of Compensation Committees and Compensation Stickiness.And the results are as follow:(1)the stickiness of managers' compensation obviously exists in the non-state owned listed enterprises;(2)the proportion of managers in the Compensation Committees has significant positive effect on the sensitivity of pay-performance of manager.And the proportion of managers in the Compensation Committees is higher,the feature of compensation stickiness is more significant.Managers will increase the degree of the sensitivity of total pay-performance to justify "the justification of result";(3)the higher of degree of commercialization,the more managers'self-interested behavior can be restrained.As a conclusion,we find that managers in the non-state owned listed enterprises also have demands for Justifying compensation,but the reason for that is different from managers in the state owned listed enterprises.Managers in the non-state owned listed enterprises take benefit from entering the Compensation Committees to seek personal interests.