Study On The Relationship Between Executives' Excess Compensation And Company Value-Creating Ability

The separation of ownership and operation results in the principal-agent problem between owners and managers.As a "rational economic man",both sides hope to maximize their own income.Therefore,the balance between executive compensation and corporate value has naturally become a difficult problem on the level of corporate governance.In recent years,the widespread emergence of senior executive pay has attracted the public indignation,which has stimulated the contradiction between the principal and the agent.Most scholars believe that it is the result of senior executive using their own position power to seek renting fraud,which leads to excessive power suppression,which has severely compromised the enthusiasm of the executives for creating value for the company.The inappropriate contraction of managerial power will still undermine the value of the company.Therefore,in order to maximize the value of the company,it is resonale to distinguish the quality of the excess salary of the executives,to encourage executives' excess compensation for capability and to contain executives' excess compensation for power.Based on this,this paper focuses on the relationship between executive compensation and corporate value-creating ability from the perspective of managerial power and managerial capability.This paper first systematically reviews the research status of executive compensation and company value,the determinants of executives' excess compensation,economic consequences,and the influencing factors of the company value-creating ability,and summarizes the principal-agent theory,information asymmetry theory,optimal contract theory,management power theory and human capital.Secondly,using the above theory,the influence mechanism of managerial power on executives' excess compensation,the influence mechanism of managerial capability and executives' excess compensation,the influence mechanism between executive capacity excess pay and company value-creating ability are analyzed,and the related research hypothesis is put forward.Then,we select the 2011-2016 year sample data of A shares listed companies in two cities of Shanghai and Shenzhen,and use the Core model to calculate the executives' excess compensation,use entropy method to describe the size of executive power,use the DEA-Tobit two stage model to quantify the size of executive ability,and build a regression model,and get the following conclusions:(1)Executive power is an important and direct factor for executives to obtain excess compensation,and the two are positively correlated.(2)Managerial capability is one of the reasons for top executives to get excess pay,and the two is significantly positive.(3)Executives' excess compensation for capability is beneficial to enhance the company value-creating ability,that is,executive energy excess compensation and company value-creating ability There is a positive correlation.Finally,in order to alleviate the conflict between the principal and the two sides and achieve mutual benefit and win-win situation,according to the conclusions above,this paper puts forward the independence of the compensation committee,sets up the corresponding salary incentive plan for different kinds of executives,encourages the ability executives,restricts the power executives,and combines them.The company's future sustainability should be considered comprehensively,including financial indicators and non-financial indicators,including performance evaluation standards.On the basis of the existing literature,this paper includes the variable of executive ability,which further enriches the research perspective of executive excess compensation,distinguishes the nature of top executives' excess compensation,rationally motivate the executive potential,and provides a powerful reference for the executive compensation incentive plan of the enterprise.