Executive Pay Performance Sensitivity And Enterprise Innovation From The Perspective Of Management Power

Innovation,as the source of power for modern enterprises to maintain vitality,can enhance the core competitiveness of the enterprises themselves.Executives,as participants and implementers of corporate internal policies,have a clear influence on innovation decisions.But innovation activities are characterized by high investment,long cycle.Such concerns often make executives hesitant,so it is necessary to provide appropriate incentives for executives.The executive pay performance sensitivity is an index to measure the effectiveness of executive compensation incentives which has a positive effect on corporate innovation.However,when executive power is too large and the company's internal supervision mechanism is invalid,executives can use their power to influence their own compensation,which affects the executive pay performance sensitivity on enterprise innovation.At the same time,in the stage of mixed ownership reform,based on the unique property rights issues,it is particularly important to compare the relationship between executive power to the compensation performance and enterprise innovation under different property rights.Based on the analysis of the status quo of enterprise innovation and executive pay performance sensitivity,this paper analyzes the interaction between executive pay performance sensitivity and enterprise innovation from the perspective of the management power,guided by corporate innovation theory,optimal compensation contract theory and management power theory.Next,this paper selected the A-share listed companies from 2009 to 2018 as the research sample,filtered and sorted the sample data,then performed descriptive statistical analysis,correlation analysis,linear regression analysis,and robustness test.The research results show that there is a significant positive correlation between executive pay performance sensitivity and enterprise innovation,and management power has a negative regulatory effect on the two.When management has greater power,the incentive effect of executive compensation sensitivity on enterprise innovation will weaken,but this moderating effect is mainly reflected in non-state-owned enterprises.Based on the above conclusions,this article provides suggestions for encouraging executives to make compensation contracts that are conducive to enterprise innovation.The company can combine the power of the company's management and the nature of property rights to formulate more appropriate compensation contracts to stimulate innovation.