Study On The Influence Of Capital Structure On The Execuitve Compensaiton Of Chinese Listed Companies

Executive compensation is an important research subject, which was based onboth Principal-agent theory and Motivation Theory. Because it is a peculiar humanresource, its competence usually is seen as the key part of the prosperity of theenterprise. So how to avoid brain drain and to improve the motivation of theexecutives are the focus of the enterprise and the scholar from domestic and overseas.At present, the enterprises make the company performance as a basis frame ofreference directly when making executive pay, however, influencing factors of theexecutive pay are variable, a single standard can’t make good incentive. Thisresearch study the influence mechanism of the capital structure on executive pay fromthe risk of angle damage view, at the same time, take the enterprise performance asintermediary variable, on top of that do the deeply research the inner, essentialrelationship among them, so can establish salary level to develop Incentive effect andconsummate company governance.Firstly, this research reviews the related literatures from home and abroad,learning the main situation about this related area. Gradually, this paper puts forwardthe research hypotheses, based on the theories of principal-agent, motivation andcapital structure, mainly choose the three years` blended data from 2008 to 2010 ofChina’s listed companies, furthermore on the basis of intermediary effect inspectionprocedures composed by Wen Zhonglin , Zhang Lei and so on. Finally, apply theSSPS software to make empirical analysis and robustness inspection, proving thispaper’s results robustness and reliability.The results of the empirical research show these:①Company’s capital structureand the enterprise performance significant are positive correlation，in line with the MM correction model, Miller’s model and Signaling theory ;②Company’s capitalstructure and Senior management’s annual pay significant are positive correlation too,and take into the consideration of the enterprise performance can make a significantintermediary effect, the proportion of the mediating effect on date of Shanghai StockExchange listed companies was 15 percent, while the Shenzhen-listed company datato calculate the proportion up to 36%;③A lso,Company’s size and seniormanagement’s annual pay significant are positive correlation, conform to the managertheory ,if there is no external condition constraints, executives are more likely toexpand the scale of the enterprise rather than increase profits. Based on the relatedresults of this paper, we make some suggestions, such as speed up the reform ofstate-owned enterprises, perfect the state-owned enterprise incentive measures;Perfect performance evaluation mechanism, the optimized salary incentive structure;Forbid the listed company blinded expanding the scale.This paper’s innovation points mainly lies in the two parts:①thinkinginnovation angle, taking the enterprise performance as the intervening variable tostudy the relationship between capital structure and the executive pay;②innovationof conclusion, this paper demonstrate the relationship between capital structure andenterprise performance is significant positive correlation, which is matched with theviewpoint about high-risk high-yield, so it proves the efficiency of capital market inChina.