Research On Executive Power,Salary Stickiness And Enterprise Inefficient Investment

The sky-high salary and zero-paying frequency are frequently reported in the newspapers,indicating that the salary incentives have not played an effective role.The incentive mechanism combining salary and business performance is invalid,largely due to the self-interested behavior of executives.The salary stickiness is that the marginal increase of salary is significantly greater than the marginal decrease of salary when the operating performance is rising.Many companies in real life show this characteristic.Executives use power to influence their remuneration.This kind of behavior has advantages and disadvantages.On the one hand,it can avoid the significant decrease in salary caused by the decline in operating performance,and on the other hand,it can reduce the salary increase that can be obtained due to the increase in operating performance.Therefore,“self-interested” executives tend to influence the sensitivity of compensation performance through power,so that the sensitivity between their compensation and profit performance is higher,and the sensitivity between the performance and the loss performance is lower,thus further increasing the viscosity of executive compensation.Features to reduce executive compensation risk.Corporate capital investment can either result in over-investment due to agency problems or under-investment in agency costs.In order to alleviate the harm caused by agency problems,the optimal compensation contract is considered as the main mechanism for coordinating executive behavior and shareholder goals.The effect of the compensation contract on capital decision-making is as follows: On the one hand,the compensation contract can coordinate the consistency of the interests of senior executives and shareholders,effectively restraining the self-interested tendency of senior executives,and prompting executives to abandon investment projects with negative net present value.The impulse to curb excessive investment;on the other hand,the compensation contract encourages executives to accept investment projects with a positive net present value,thereby alleviating the tendency to underinvest.The existence of executive compensation stickiness reflects the failure of the compensation contract to a certain extent.The salary stickiness not only does not effectively alleviate the principal-agent problem,but will further aggravate the principal-agent problem.The existence of the salary sticky characteristics makes the phenomenon of corporate rewards and penalties more prominent.Salary stickiness allows executives to gain more self-interested asymmetric investment returns,leading executives to have more serious non-efficiency investment tendencies.Investment activities will cause the scale of the company to expand.The ever-expanding scale of investment activities will lead to an increase in the controllable resources of senior executives.For example,the status of executives in the enterprise,their own salary levels and professional reputation will be enhanced,and executives can obtain private benefits through these methods.Investment activities in business management activities are exception management,and investment activities are more susceptible to executive control.Executives are at the core of the company’s power.Specifically,they have greater power over corporate investment decisions and development plans.Considering self-interested factors,executives use their power to act on corporate investment decisions,further causing excessive investment or underinvestment.When the enterprise has the characteristics of non-efficiency compensation incentives such as executive pay sticky,pay sticky becomes an important channel for executive power to invest in non-efficiency,and plays a certain role in mediating.At present,how to effectively restrain executives’ self-interest has become an important issue that needs to be solved urgently in corporate governance reform.Therefore,the relationship between executive power,salary stickiness and corporate investment behavior is studied for executive incentive mechanism and corporate investment behavior.The specification can provide a meaningful reference.First of all,this paper reviews domestic and foreign research results from the aspects of executive power and salary stickiness,salary stickiness and enterprise inefficient investment,executive power and corporate investment,and gives a brief review.Secondly,it introduces the principal-agent theory and most The theory of superior contract and the theory of executive power provided theoretical support for the subsequent empirical research.Then,empirical research was carried out to study executive power,salary stickiness and enterprise with executive power,salary stickiness and corporate investment behavior as the starting point.The relationship of investment behavior.In the empirical study,the first step is to prove the existence of executive compensation viscous? In the second step,whether the executive power has an impact on the pay viscosity;the third step is whether the pay sticky is effective for the non-efficiency investment of the enterprise;the fourth step is to prove that the pay sticky is the intermediary variable that the executive power influences the non-efficiency investment of the enterprise.Therefore,this paper takes the research on China’s Shanghai and Shenzhen A-share listed companies from 2009 to 2017 as a sample,and makes relevant research and analysis,and obtains research conclusions:First,there is an asymmetric change in executive compensation when business performance rises and falls,that is,executive compensation shows a sticky character.Regardless of the total sample or the nature of property rights,the phenomenon of executive pay viscous is significant,but the private company’s executive pay viscosity is lower than that of state-owned enterprises.Second,executive power has a significant positive impact on payroll.The study in this chapter found that the executive power of the whole sample group and state-owned enterprises has a significant positive impact on salary stickiness.Private enterprises have not found that executive power has a significant impact on executive pay stickyness.Third,executive pay sticky has a significant positive impact on corporate over-investment behavior,while the impact on under-investment is not significant.If the executive payroll is more viscous,the impact of salary stickiness on the over-investment of the company is more significant.The reason is that the salary stickiness causes the investment income of the executives to over-invest in the enterprise to be asymmetric,and it has the opportunism of over-investment.tendency.Fourth,executive power increases the excessive investment behavior of enterprises through salary stickiness.This chapter examines the relationship between executive power,pay sticky,and corporate inefficiency.The conclusions of the study show that,in general,the executive pay viscosity has played a mediating role in the influence of executive power on excessive capital.Compared with private enterprises,this phenomenon is more significant in state-owned enterprises than in private enterprises.After in-depth theoretical analysis and empirical testing,the main innovations of this research are:First,the research on the impact of salary incentives on corporate investment behavior mainly focuses on the characteristics of executives,executive compensation incentive structure,executive monetary compensation,long-term equity incentives,and few scholars directly analyze the characteristics of executive compensation.The impact on corporate inefficient investment behavior.Based on this,this paper tentatively examines the impact of executive pay sticky on corporate inefficient investment behavior,in order to provide new empirical evidence for the study of executive compensation incentives.Secondly,on the basis of summarizing the existing research literature on the factors affecting the executive pay viscosity,this paper may have a more serious multiple approach to avoiding business performance,representing the dumb variables of rising and falling operating performance and the three-fold interaction of influencing factors.Linearity problem,using the salary viscous calculation method of Budan and other methods in the research method,tentatively directly test the influence of executive power on salary stickiness,in order to more accurately explore the causes of executive compensation stickiness.