| With the establishment and continuous improvement of China’s performance-oriented compensation institution,the compensation of executives is linked to the performance of enterprises,which makes the salary incentive mechanism more rational.However,in recent years,the emergence of conditions,such as “high-end executives’ salary”,“zero salary”,“remuneration and performance inversion” of listed companies in China has aroused piblics’ wide spread concern about the issue of executive compensation.What is the basis for good money of the executives? Who decides the executive compensation? Is the salary maching their performance? In this context,this paper attempts to explore the issues related to the executive pay viscosity of state-owned listed companies in China,to reveal the possible problems in the process of China’s salary incentive mechanism,and propose corresponding policy recommendations to continuously improve the salary system.This paper takes the 2010-2017 China’s Shanghai and Shenzhen A-share state-owned listed companies as samples,based on the principal-agent theory,the optimal compensation contract theory and the management power theory,systematically combing and summarizing relevant literature at home and abroad.Combined with China’s actual situation and special institutional background,it distinguishes different levels of government control,and uses management power as the entry point to explore the phenomenon of executive pay viscous.On the basis of relevant theoretical analysis,the multivariate regression method is used to empirically test the sample data,and finally the policy recommendations are proposed based on the research conclusions.Through empirical research,this paper draws the following conclusions: First,in China’s state-controlled listed companies,there is a significant positive correlation between executive compensation and corporate performance which is said “performance rises,salary rises,and performance decreases,salary decreases”,and there is sensitivity between performances,but in the two different directions of rising performance and declining performance,there is an asymmetric feature of the range of changes,that is,there is a phenomenon of executive pay viscous.Second,there is also a significant positive correlation between management power and executive compensation.The greater the power that management has in its hands,the greater the likelihood of using power to rent-seeking,what makes compensation level higher,and pushing the asymmetry of executive compensation greater when performance rises and performance declines.Management power will enhance the viscous behavior of executives.Third,after distinguishing between different levels of government control,both central and local government-controlled enterprises have salary stickiness,but the level of executive compensation of central enterprises is lower than that of local governments.After considering the influence factors of management power,whether it is central or local,the sensitivity between compensation and performance will be enhanced when the performance rises,but there is no evidence to further prove that management power will be downwardly sticky when performance declines.In view of the above research conclusions,this paper proposes policy recommendations from the aspects of improving the compensation management system,improving the internal corporate governance structure,strengthening external supervision,and improving relevant laws and regulations.Based on the specific situation of China,this paper divides the state-owned listed companies in China into different levels of central government and local government control,compares and analyzes the differences in the influence of management power on executive pay sticky,and proposes targeted policy recommendations for existing differences.It will help relevant policy makers in China to understand the power efficiency of management,rationally allocate power,and improve the salary incentive mechanism. |
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