Executive Internal Pay Gap,Board Independence And Investment Efficiency

As a key link in the process of business development of an enterprise,investment activities are of great practical significance.From the macro level,effective investment can achieve the optimal allocation of social resources and accelerate the steady and fit development of the economy;from the micro level,effective investment is an important engine for increasing the future cash flow of an enterprise,and an important driving factor for improving the competitiveness of an enterprise and creating value for the enterprise.At present,in China's capital market,under the influence of multiple factors such as information asymmetry and principal-agent problems,inefficient investment behaviors occur frequently.Senior executives are responsible for the important work of managing and operating enterprises,and shoulder the core leadership and decision-making responsibilities in the strategic investment of enterprises.Therefore,how to effectively urge senior executives to improve the quality of their work,guarantee that their objectives are consistent with those of shareholders,and then enhance the efficiency and level of corporate investment decisions has always been a hot theme in academic research.As an important means to solve the entrusted agency problem,executive compensation incentives can optimize the quality of internal governance of the company,prompt executives to maximize the interests of shareholders as the standard for behavioral decision-making,and thus improve the efficiency of corporate investment.So far,the research results on the impact of executive compensation levels on investment decision-making are quite rich and comprehensive,but the literature on the analysis of investment efficiency from the perspective of executive internal salary gaps is still relatively scarce.Therefore,this is the entry point of this article.As the center of the corporate governance system,the board of directors has significant inspection and policy-making functions.The responsibilities of the board of directors include hiring and supervising management,reviewing and agreeing on major key decisions,and safeguarding the interests of all shareholders.The board of directors plays the role of the company's management and shareholders Play an irreplaceable hub role.Independence,as the soul of board governance,has a crucial impact on the effectiveness of board function implementation.Therefore,in a detailed study of the relationship between executive compensation gaps and investment efficiency,the independence of the board of directors may show an appropriate degree of adjustment.In the enterprise,the independence of the board of directors is different,the intensityof the constraints imposed on the executives is different,and the performance of the salary gap within the executives may also be different.Therefore,placing the independence of the board of directors in the same research framework can achieve certain research significance.Based on this,this paper takes the information asymmetry theory,principal-agent theory,championship theory and behavior theory as the theoretical support,and takes10146 samples of Shanghai and Shenzhen A-share listed companies in China as the research object from 2011 to 2018.The relationship between the gap and investment efficiency and the influence of the independence of the board of directors on the relationship between the two.The study found that the increase in the internal salary gap of executives led to a decline in corporate investment efficiency,and the independence of the board has a negative correlation between the two.Inhibition.Through further research,it is found that the increase in the internal salary gap of executives will lead to the deepening of enterprises' overinvestment and underinvestment,and the higher the independence of the board of directors,the weaker the effect of the internal salary gap of executives on overinvestment and underinvestment.This paper also conducts group tests on state-owned enterprises and non-state-owned enterprises according to the different natures of the actual controllers of the enterprises.The results show that the executive internal pay gap is negatively correlated with investment efficiency in non-state-owned enterprises,and the board's independence The moderating effect has also been verified,but in state-owned enterprises,the negative correlation between executive internal pay gap and investment efficiency is not significant.This article is chiefly developed in six sections: the first section is an introduction,the focal point of this section is the research backdrop and implication of this article,ideas and means as well as the content and framework;the second section is a literature review,combined with the research theme of this article,This section mainly expounds from three perspectives: the economic consequences of the salary gap within the executives,the influencing factors of investment efficiency,and the relationship between board independence and investment efficiency,and generalizes,analyzes and refines the academic achievements and opinions of relevant literature at home and abroad;The third section is an overview of the theory.This section first defines and explains the concepts of executive internal compensation gap,board independence and investment efficiency,and then relates the principal-agent theory,information asymmetry theory,championship theory and behavior theory.The theory is discussed and explained;the fourth section is theoretical analysis and hypothesis.This section first analyzes the relationship between executive compensation gaps and investment efficiency based on related theories,and proposes a pair of opposing hypotheses,and then The analysis derives the influence of the independence of the board of directors on the relationship between executive compensation gaps and investment efficiency,and proposes another hypothesis.The fifth section is an empirical test.This section includes the design of research models,the selection of research samples,the selection of key variables,Descriptive statistical analysis,correlation analysis,multiple regression analysis,further testing,and robustness testing,etc.,empirical testing and conclusion analysis of the topics studied in this article;the sixth section is the research completion and policy suggestion.