Research On The Compensation Of Independent Directors

The performance of independent directors plays an important role in the high-quality development of listed companies in our country.Therefore,how to set up salary incentive for independent directors to perform their functions is crucial to the prosperity and stability of our capital market.The unreasonable remuneration,high risk and high responsibility make it difficult for the independent directors to pay attention to the operation and supervision of the listed companies.After the financial frauds broke out in the 2021,the independent directors started to leave,and the serious derailment between compensation and risk became the main reason.After this incident,determining the quantitative basis of independent director’s salary has become a key issue in the process of perfecting the independent director system in our country’s listed companies.Based on the literature review of agency theory,stakeholder theory,reputation protection theory,and human capital theory,this thesis analyzes the influencing factors of independent directors’ compensation from two perspectives: the characteristics of listed companies and the individual human capital characteristics of independent directors,and constructs a 13-item index system based on these factors.Using the 2021 A-share listed companies as the research sample,the thesis uses the curve estimation method to analyze the relationship between independent director compensation and the 13-item index system,and establishes a predictive model for independent director compensation.Then,the accuracy of the model is tested using a verification sample,and the results show that the model’s prediction accuracy reaches 98.77% under the condition that the error rate does not exceed 15%.Based on the research findings,the thesis proposes recommendations for quantitatively determining independent director compensation.The thesis takes the compensation of independent directors in China as the starting point,uses a multiple nonlinear regression model as the building approach,establishes an index system and prediction model for the factors affecting the compensation of independent directors,and provides a quantitative method for determining the compensation of independent directors to listed companies.To some extent,it makes up for the shortcomings of research on the compensation of independent directors in China,and helps to supplement and develop the independent director system in China.