A Study On Incentive Mechanism Design For Managers Based On Stakeholders

In knowledge economy and network economy corporate social responsibility has prevails throughout the world. Firms begin attach importance to stakeholders, and stakeholders dissatisfy such attitude, and actively participate in firms'governance. Managers become stakeholders'agent rather than shareholders'agent, and they face the challenge to take diverse approaches and measures to balance interests between shareholders and stakeholders. Stakeholders'incentive helps to coordinate interest conflict between managers and shareholders. Practice from different countries including China tells that how to provide incentive to top managers to maximize firms'value is the pioneering issue of modern enterprise management. Incentive mechanism plays positive roles to improve firms'performance and how to provide incentive to managers under stakeholders'common governance becomes become the challenge for all firms.Different from incentive in principal-agent, stakeholders devote human resource,knowledge resource and social resource to firms, and create value by the organization reengineering,coporate restructuring,strategy alliance,virtual operation, and distribute value to coordinate their interests to reach the stable equilibrium, such equilibrium may be more important than disequilibrium for social value. So stakeholders'incentive becomes new challenge for firms'reform in different countries including China.The traditional principal-agent can not resolve managers'incentive inefficiency by stakeholders from asymmetry information between managers and stakeholders. To order to resolve such problem, this thesis firstly put forwards basic method to incentive by stakeholders under information asymmetry. The thesis bases its research on the mechanism design theory, and makes prescriptive studies by the method of game theory. Prescriptive analysis compares principal-agent relationship with stakeholders'relationship, and compares non-cooperative game with cooperative game, and finds necessary condition and sufficient condition of cooperative game between stakeholders. Then this part discusses the selection of different principal from stakeholders.The core issue of incentive mechanism design is to select incentive contracts, such contracts have close relation with corporate governance,management manners and performance methods. This thesis innovatively analyses factors that affect selection of incentive contracts with quantitative method. Firstly, the thesis deducts the basic incentive models, and designs the relative performance evaluation and multiple dimensional evaluations. Secondly, the thesis quantitatively analyses governance variables endogenetic in incentive contract, and studies the financial effects from these variables. Thirdly, this thesis compares stewardship manner with principal-agent manner, and introduces empowerment variable and stewardship variable into incentive contract.The premise of incentive mechanism design is to gather information to evaluation managers'performance. The thesis introduces performance evaluation method under asymmetry information, and provides criteria of screening such performance indexes, and analyses signaling from performance evaluation from principals and information disclosure, and designs stakeholders-based performance evaluation models for managers.The feedback of incentive mechanism design is to estimate incentive effect. The estimate for incentive effect from compensations is a good way for incentive mechanism evaluation. Whether Chinese firms have enough incentive to maximize firms'value is a pending problem. Prescriptive results show that compensations are in fact the financial contracts, their incentive effect lies on contracts forms. The preceding studies from China's listed firms can not get needed result for three reasons: those researches can not include the benefits of control, and can not include stakeholders'effect, and can not estimate risks for firms and managers, and can not estimate properly either. This thesis estimates benefits of control,stakeholders'effect and risks for firms and managers. With the panal data model, empirical analysis shows that compensation incentive can not take effect for the improper design of incentive contracts. These results suggest that the incentive effect is determined by endogenetic contract factors and stakeholders such as shareholders and employees. Further empirical analysis indicates that correlation coefficients have significant difference between without risk sharing efforts and with risk sharing efforts in capital market. This result suggests that asymmetry information leads to incentive unbalance among China's listed firms, which cause"excessive incentive without equilibrium"and"deficient incentive with equilibrium".