Management Power?internal Control And Executive Compensation Performance Sensitivity

The appropriate executive compensation incentive contract can make the shareholders and management interests consistent,effectively reduce the agency problem between the shareholders and the management caused by the separation of ownership and management rights,thus reducing the agency cost.However,in recent years,the phenomenon of decoupling between salary and performance has been frequent,from the first person of Ma Mingzhe's top executives to the high proportion of executive compensation in the three Ai Fu enterprises,while the performance appears to be avalanche.The researchers have always thought about how to make the management pay closely linked to the performance of the company and how to effectively prevent the executives.The use of power to determine the high salary and other problems.At the same time,with the occurrence of events such as China's "silver Guangxia","Zhonghang oil" and "Xinhua Pharmaceutical",a series of internal control policies have been promulgated.Can internal control constrain managers' self-interest to a certain extent,thus mitigate the agency problems brought by managerial authority and affect the performance sensitivity of executive compensation? Based on the above considerations,this paper studies the relationship between management power,internal control and executive compensation performance sensitivity,and further explores the influence of internal control on the relationship between management power and executive compensation performance sensitivity.This paper is mainly divided into five parts.The first part introduces the research background and significance,research contents and methods.The second part reviews the literature about managerial power,internal control and executive pay performance sensitivity.The third part,based on the theoretical analysis,puts forward the research hypothesis,establishes the research model,and defines the variables.The fourth part is the empirical analysis based on the collected data,in order to test the hypothesis.The fifth part summarizes the conclusions of this study,puts forward relevant policies,and points out the shortcomings and future prospects of the article.This article takes China's 2010-2016 A-share listed company as the research object.,and uses stata14.0 software to conduct empirical tests.:(1)the management power is negatively related to the performance sensitivity of executive compensation.That is,the greater the power of the management,the more unrelated to the performance of the executive compensation.The result shows that the executives do use power to get higher pay for themselves;(2)the more effective the internal control system is,the higher the sensitivity of the executive compensation performance,which illustrates the effectiveness.Internal control can make the executive compensation incentive mechanism play an active role;(3)perfect internal control can restrain the negative impact of management power on executive pay performance sensitivity,which shows that internal control can inhibit the self-interest of executives.The results of this study mean:(1)only the establishment of an effective executive compensation contract can play a positive constraint on the management of the company,and thus enhance the correlation between the salary and performance of the company.(2)the listed companies can strengthen the supervision of management and restrain the management of management by improving the company control system.Good behavior.This research enriches the research achievements in management power,internal control and other fields,and provides reference for corporate governance improvement.