Research On The Relationship Between Executives' Sources,Accounting Conservatism And Compensation Contracts

After the implementation of the reform and opening up policy in China,the speed of development of Chinese enterprises far exceeds that of the past.Private enterprises have benefited the most from this policy,and their proportion in China's market economy is growing.PwC's " The Global Family Business Survey-China Report " shows that the number of private enterprises in China's market has surged to 27.263 million by the end of 2017.In the A-share market,the proportion of family businesses in all private companies is constantly increasing,from 48.9% in 2016 to 55.7% in 2017.As of April 2017,the number of family businesses listed on China's domestic stock exchanges has reached 1,112.Family businesses occupy more than 50% of the total number of private enterprises in China.In summary,family business plays an indispensable role in China's economic system.Therefore,this paper focuses on family business and studies the role of compensation contract in family business executives.In the enterprise,setting up a reasonable salary system for senior executives,reducing agency problems and agency costs has always been an important part of corporate governance.At present,most of China's enterprises rely on the performance of executives to determine executive compensation,executives will be executives.The combination of self-interest and corporate interests reduces the self-interested behavior of executives.In the family business,due to its special management structure and management form,it faces many management problems that do not exist in non-family enterprises,especially the executives of the company are selected from among the family members.When executives in a family business are family members,the relationship between their compensation and performance is not the same as that of a professional manager.The difference in the impact mechanism makes the company consider different factors in determining the executive compensation.Therefore,the research on the relationship between accounting performance and salary when the source of the executives in the family business is different is very important for the family enterprise to set up a comprehensive salary system.The meaning.This paper uses the literature reading and empirical analysis methods,starting from the source of family business executives,studies whether there is a difference in the relationship between corporate performance and compensation of family members as executives and professional managers as executives.On this basis,the influence of accounting conservatism on the sensitivity of executive compensation performance in family businesses is explored.The multivariate linear regression method was used to study the effects of different executive sources on the contractual role of compensation,and the regulatory role of accounting conservatism.The Chow test was used to verify the structural differences between groups of executives at different sources.The research shows that:(1)There is a significant positive correlation between managerial compensation in the family business and the accounting performance of the enterprise,which indicates that the compensation contract of the executives in the family business is effective;(2)The enterprise that holds the senior management relative to the family members.In the enterprises where professional managers are senior executives,accounting information has a stronger contractual effect on compensation incentives;(3)In family businesses,accounting conservatism reduces the sensitivity of executive compensation to accounting performance;(4)In contrast to family members who are executives,the firm's that professional managers as executives accounting conservatism is less likely to replace accounting performance in determining executive compensation.At the end of the paper,the results of empirical analysis provide countermeasures and suggestions for the management methods of family businesses in China.