Research On The Continuous Model Of Executive Incentive And Replacement

Effective executive incentive is always an important research direction of management The Sky-high salary and " Departure tide" phenomenon have triggered the fierce discussion.At present the enterprise generally take some actions,such as short salary incentive,long-term performance incentive and equity incentive to incentive effectives.but the enterprise interior management contradiction has not been at ease,executives' self-interest behavior still exist.In addition industry enterprises in our country is fecing the deepening adjustment the executives in the Internet enterprises change frequently,having a great impact on the stability of the enterprise.Executives change as the most severe and extreme incentives,become the most important management decisions,influencing the enterprise survival.Therefore,under the background of corporate governance mechanism reform how to reduce management cost caused by asymmetric information design effective executive incentive contract,reasonable arrangement of the replacement of executives is undoubtedly the difficulties faced by enterprises.In this paper,under the background of company executive compensation reform in our country,based on the existing executive incentive and change of research results at home and abroad,analyze the executive incentive contracts and replacement strategy using the continuous time model.This Paper's main research content is as follows:First,we study the agent's self-interest behavior(hidden income,on-the-job consumption)effect on incentive contracts,and introduced the principal supervision mechanism,build the continuous time dynamic incentive and supervision model.By means of stochastic control and dynamic programming method,we get the corresponding optimal contract decision.Research conclusion as follows:? when agents exist hidden income behavior,the agent's optimal effort is equal to the marginal productivity of project risk;With the increase of agent hidden income behavior,agent's expected revenue declines;The intensity of the supervision on principal increases,the agent's expected revenue will be reduced.? when the agent is on-the-job consumption,if agent's on-the-job consunption is higher,the optimal effort level is higher;Agent expected revenue function is concave function of on-the-job consumption.The optimal supervision function is a linear combination of the logarithmic function and output agent revenue.The intensity of the supervision of the principal is higher,the greater the agent's expected revenue will be reduced.?the study also found that when the agent is self-interest behavior(exist hidden benefit and on-the-job consumption behaviors),the higher fluctuations in the outside world,the greater the agent's expected return is smaller.In this paper,the research of principal-agent self-interest behavior in continuous dynamic model,the contract design and project risk management of the enterprise to provide a more scientific decision support.Second,under the continuous time frame,this article introduced the ideas of options to executives replacement strategy study,considering the Interim executives,explore the effect of principal risk appetite and environmental uncertainty on the strategy of executives replace,and timing of executive replacement under different strategies.Study found:? in the continuous change of strategy,conservative principal ask for higher discharge threshold for Interim executives,tend to delay replace interim executives,as well as higher hired threshold for succession executives,the principal tend to delay hiring succession;? radical principal ask for low discharge threshold for the interim executive,tend to replace interim executive,meanwhile the threshold of hiring succession executives is low,tend to hire succession executives in advance.?principals could delay the dismissal time of high output executive;The improvement of external environment uncertainty will accelerate transition executive's dismissal and delay the succession of executive hiring.With the improvement of working managers dismiss probability,conservative clients request higher output for working managers;when the client's risk preference and on-the-job executives dismissed probability are fixed,the external environment uncertainty raised the threshold of the executives to stay in office.?in continuous change and leapfrog replacement strategy choice,when executives succession and transition executives expect output at lower levels,continuous replacement strategy is dominant.With the improvement of external environment uncertainty,conservative client between continuous and leapfrog strategy will give preference to leapfrog strategy,radical client will give preference to continuous strategy.Research conclusions provide certain theoretical basis for our country enterprise management turnover.