Negative Media Reports And Executive Compensation Of State-owned Enterprises

Executive compensation is inextricably linked with corporate governance, social justice and social corruption which are beneficial to the people's livelihood hotspots.State-owned enterprises'(SOE) executive compensation has been an unusually sensitive topic in today's society; the executives of state-owned enterprises' salary reports can be heard everywhere and the spread and information dissemination function of the media are especially outstanding. So can the media play a supervision and management function under the background of the public attention to the chaotic state executive compensation? The existing literature shows that negative media can prompt companies adjust the executives' salary, but mainly refers to the monetary compensation. In practice, the enterprise also award executives some company's shares. In some enterprises, on-the-job consumption has also been a main way to company executives' self-motivation. So the benefits obtained from the company including monetary compensation, managerial ownership and on-the-job consumption. If you want to study the negative media of senior executives' pay in state-owned enterprises, in addition to consider the impact of monetary compensation of executives of state-owned, it should also investigate the effects of negative media of executives' shareholding and perks. Based on the a-share market, we study the state-owned companies' salary from 2012 to 2014 as samples of the financial data. We try to answer the following questions under the support of the government regulation theory and agency theory. First, the negative media reported can lead the company adjust monetary compensation; can the media take a little impact on executive's shareholding and on-the-job consumption? Second, can the executives will seek compensation instead by adding other interests to instead of the reduce of the monetary compensation? Negative media reports will make the state-owned executives' monetary compensation decline, on-the-job consumption rise and on the job consumption has a certain effect on the compensation. But further study found that If the media on the salary of SOE executives are not reasonable to report, the enterprises will increase the proportion of state-owned shares, but If there exist themedia on the SOE such as poor management or other negative information, the stateowned enterprise executives will reduce their shareholding ratio. I think in the process of supervision of the executive compensation, we should improve the salary system,adjust the salary structure, expand the scope of the compensation disclosure and enhance the transparency of the pay disclosure.