An Empirical Study On Earnings Management Of Listed Companies From The Perspective Of Equity Excess Salary

In recent years,Chinese listed companies have deepened the reform of non-tradable shares,and the capital market has developed and improved accordingly.However,there are also a series of problems.The earnings management of listed companies is a typical example.Nowadays,the securities regulatory authorities,investors,creditors and other stakeholders are paying more and more attention to the issue of earnings manipulation by the executives of listed companies.In the new all-current capital market environment,the motives and means of earnings management of the executives of listed companies are more complex and more hidden.It is of great practical significance to study the earnings management of senior executives in Listed CompaniesExecutive compensation contract is an important factor affecting earnings management of listed companies and an important link in establishing earnings management constraint mechanism.From the perspective of compensation contract,taking the non-equilibrium panel data of A-share listed companies in Shanghai and Shenzhen from 2010 to 2017 as the sample,this paper makes an empirical study on the relationship between the equity excess compensation of executives and earnings management of listed companies.Firstly,the existing literature was sorted out from the perspectives of excess compensation,earnings management,CEO power strength and internal control.It is concluded that the existing literatures on excess compensation focuse on monetary compensation and seldom involve equity excess compensation.What is more regrettable is that the existing researches have not combined equity excess compensation with earnings management.From the perspective of corporate governance,based on the principal-agent theory,this paper expounds the effective contract theory,management power theory,two-factor theory and prospect theory,laying a foundation for the following theoretical analysis and empirical design.Through theoretical analysis and empirical test,the conclusion are drawn: there is a significant positive correlation between executives' equity excess compensation and real earnings management;there is no significant correlation between executives' equity excess compensation and accrual earnings management;compared with state-owned enterprises,the positive correlation between equity excess compensation and real earnings management is more significant in private enterprises;the power intensity of CEO has a positive moderating effect on the positive correlation between the equity excess compensation of executives and real earnings management;the quality of internal control has a negative moderating effect on the positive correlation between the equity excess compensation of executives and the real earnings management.Finally,the research conclusions are summarized and the corresponding policy suggestions are put forward.This paper explores that the current equity compensation incentive of Listed Companies in China is in line with the "Effective Contract View" or "Earnings Risk View",and contributes to solving this dispute from the perspective of equity excess compensation.The existing research on excess pay pays more attention to monetary pay,not exploring the relationship between equity excess compensation and earnings management.In this paper,accounting information and capital market information are included in the equity compensation measurement model,and the impact of equity excess compensation on earnings management is studied,which further enriches the research on the internal relationship between excess compensation and earnings management.This paper explores whether CEO power intensity and internal control quality can play a role in the relationship between equity compensation and earnings management,which provides an important perspective on how to restrain the earnings management of senior management team under the incentive of equity excess compensation.