Institutional Investors,Media Attention And Executive Compensation Stickness

A perfect and efficient compensation contract model is often the key to reduce the principal-agent cost between the owner and the manager of the enterprise.In recent years,with the rapid development of the economy and the deepening of marketization,China's listed companies have initially established a more reasonable performance compensation system.In this research,most of the domestic scholars through their own research proved that the executive compensation and corporate performance in China has certain sensitivity,and also some scholars through further study found that the sensitivity of this kind of executive compensation and corporate performance is not symmetrical relationship,namely the executive compensation may be steadily improving,with the rise of corporate performance but not with the corporate performance will be reduced and falling synchronization,a phenomenon called executive pay viscosity.The stickiness of executive compensation shows that China's compensation contract system is at a preliminary level,and there is still a huge space for further improvement.As a result,it is possible for some executives to take advantage of the information asymmetry in principal-agent relationship and the power granted by the enterprise owners to seek their own interests,so that the principal-agent cost of the enterprise will rise instead of fall,and the rights of the enterprise owners will be infringed.Based on the theory of entrust-agent,business owners can't every moment of the hosting of managers supervise entrusted to enterprise,and based on the theories of management power,on the basis of the principal-agent problems,management is more likely to own lusts and infringe on the rights and interests of shareholders,of which one way of doing this is through with the authority of the owner,to make itself more favorable compensation contracts,to stabilize their own pay growth levels,earn more cash.Along with our country reform and open policy of gradually deepened,institutional shareholder activism is accepted by more and more enterprises,and gradually realized its importance,actively participate in the whole process of corporate governance,but unilateral internal supervision often because of various factors of congenital deficiencies,at this point,just need more external forces to improve the system of compensation contracts.In numerous external forces,the media attention as the information age growth one of the factors of influence by leaps and bounds,can make use of its information transmission is fast,guide the public opinion is the prerequisite for convenience,in reducing the degree of information asymmetry,reduce principal-agent cost,and has played a positive role in further standardize executive pay.Based on the data of Chinese listed companies from 2014 to 2018 as research samples,through the regression analysis to explore the relationship between institutional investors and executive compensation viscous,at the same time,in order to study the media attention to the external factors on executive pay the influence of viscosity,in the study of institutional investors and executive pay is sticky,joined the media attention the adjustment variables,according to how much media attention to the number of the sample data grouped regression analysis,test the adjusting function of media attention.Through the empirical study of this paper,the following conclusions are drawn:first,the phenomenon of executive compensation stickiness is widespread in listed companies in China;Second,as capable and motivated business owners,institutionalinvestors can significantly reduce the stickiness of corporate executive compensation.Third,media attention,as a positive external force,can further reduce the stickiness of corporate executive compensation.In this paper,starting from the inhibitory effect of institutional investors on executive pay,discusses the impact of institutional investors on executive pay viscosity path,namely the regulation of media attention,can put forward by improving the media independence,improve the equity structure reduce executive pay sticky way,for our country listed company how to avoid the influence of the viscosity of executive pay provides a theoretical basis.