Research On The Influence Of Executive Compensation On Real Earnings Management Of Listed Companies

General Secretary Xi Jinping put forward the important task of improving the quality of listed companies at the 2018 Central Economic Work Conference.As the main body of the capital market,the quality of listed companies affects the sustained and healthy development of the capital market in all aspects.At present,listed companies often have scandals about financial fraud.The widespread earnings management behavior is one of the reasons for the serious decline in the quality of financial information.At the same time,the high salaries of senior executives in listed companies have aroused people's attention.When most scholars study the influence of executive compensation on real earnings management,they usually focus on the influence of executive compensation on real earnings management.Few scholars study the influence of executive external compensation gap on real earnings management.This article takes this as a starting point to deeply discuss the influence of executive compensation on real earnings management.While confirming the existence of real earnings management in listed companies,it provides certain basis for listed companies to formulate reasonable compensation system and internal supervision mechanism,and also lays a stable foundation for the establishment of supervision system of real earnings management.Uses literature research to summarize the results of scholars,and uses qualitative analysis to elaborate the relevant theories of executive compensation and real earnings management,introduces the current situation of executive compensation and real earnings management in listed companies in China,and analyzes how the executive compensation of listed companies in China affects their real earnings management behavior.The empirical analysis method is applied to test the research hypothesis of this paper.The research results show that the salary level of senior managers of listed companies is indeed a major reason for these senior managers to conduct real earnings management behavior.Executive compensation level has a significant promotion effect on real earnings management.The higher the salary that executives receive from listed companies,the more self-interested motivation they have to conduct more real earnings management behaviors that affect corporate earnings.Under the condition that other conditions remain unchanged,the internal and external salary gap of senior managers will to some extent encourage senior managers to conduct more real earnings management behaviors based on self-interest.The larger the salary gap is numerically,the stronger the feeling of psychological imbalance of senior managers will be,thus the motivation for real earnings management will become stronger.On this basis,from both internal and external environment of the enterprise,reasonable suggestions are put forward to improve the salary of companies and standardize behavior.