| Under the background of separation of ownership and control,many enterprises have agency problems.According to the theory of best contract,the best way to solve agency problems is to be paid by the board of directors according to the performance of management.Only in this way can the management be encouraged and urged to better fulfill the entrusted responsibilities of the owners,and the data and information disclosed in the financial reporting are the main forms of performance of the enterprise.Lower readability of the financial reporting increases the noise between senior management efforts and corporate performance,and if you want to create a more sensitive and effective compensation system that matches the efforts made by the professional manager,It is necessary to improve the quality of financial reporting information disclosure and make the internal information more transparent.Strengthening the readability of the financial reporting can enhance the accuracy of corporate performance signals,and can better reflect the behavior of managers,so as to improve the sensitivity of management performance and compensation.Based on the theoretical analysis of impression management theory,principalagent theory,information asymmetry theory and efficient market hypothesis,this paper puts forward three research hypotheses.The interpreted variables in the model are professional manager compensation,and the explanatory variables are mainly the readability of reports,the performance of enterprises and the changes of enterprise performance.The interactive items are introduced into the model to carry on the concrete analysis.Select Shanghai Stock Exchange,Shenzhen Stock Exchange A-share main board listed companies 2011-2015 data for 5 consecutive years.The purpose of this paper is to explore whether the readability of different reports of listed companies will affect the compensation and the sensitivity of professional managers compensation and company performance and salary viscosity through the establishment of a theoretical analysis framework and an empirical study.This article will introduce the total number of words in the annual report,the proportion of financial terms in the annual report,and the proportion of strokes in the annual report(6 to 15)to measure the readability of the annual report,and the performance of the enterprise is represented by the rate of return on net assets of the company.Professional manager compensation is measured by the natural logarithm of the average value of the management monetary compensation and the market value of the management holding stock.Through the regression to the three variables,the correlation between each measurement index and the professional manager compensation is obtained.Through empirical research,this paper draws the following conclusions: 1.There is a significant positive correlation between the compensation of professional managers of listed companies and readability of the financial reporting;2.There is a significant positive correlation between the readability of the financial reporting and the sensitivity of management compensation and performance of listed companies;3.The high readability of financial statements will reduce the salary stickiness of professional managers.According to the research results,this paper puts forward the following suggestions: strengthening the legal construction of information transparency,supervising and promoting the readability of the financial reports of listed companies,perfecting the information disclosure and assessment system and professional manager compensation system.The conclusions of this paper show that the readability of reports can solve the problem of information asymmetry between board of directors and management to a certain extent.In addition,it also provides a new angle and method for listed companies to improve readability of reports.It has certain guiding significance for the company to promote and perfect its own compensation system. |
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