Property Rights, Corporate Governance And Perks Of Managers

As early as the1970s, managers’ perks have been proposed, but the research in this field is very rare. Until recent years, managers’ perks finally received extensive attention.State-owned Assets Supervision and Administration Commission of the State Council (SASAC) promulgated the "guidance on regulating the managerial consumption of managers in state-owned enterprises" in2006, which defines managers’ perks as the consumption expenditure required by managers to perform job duties. Ministry of Finance, Ministry of Supervision, the Audit Commission and the SASAC have released a lot of documents since2006. The authorities began to further standardize the opportunistic behavior of managers, which attracts more attention to this issue. Corporate governance, as an effective system, can solve the conflicts of interests between owners and operators. We wonder if corporate governance can inhibit the opportunistic behavior of managers. The researchers wanted to know exactly how the corporate governance affects managers’ perks, while regulators also hope to develop more effective control measures to constrain, manage and supervise the opportunistic behavior of managers through research.This thesis analyzes the relationship between the nature of property rights, corporate governance and managers’ perks using standardized analysis and empirical analysis. This thesis can be divided into six parts:The first part is preface. It introduces the research background, research significance, research contents and research methods, and states contributions and limitations of this thesis.The second part is about domestic and international literature review. It summarizes the previously related literatures.The third part is about theoretical analysis and research hypothesis. It first explains managers’ perks and corporate governance, analyzes the relationship between corporate governance and managers’ perks, and then analyzes the relationship between the nature of property rights, corporate governance and managers’perks. Afterwards the research hypothesis is proposed accordingly.The fourth part is about research design. It states in detail sample-selecting process and data sources, and introduces the models and variables.The fifth part is about the results and analysis of empirical tests. It shows the empirical tests results, and demonstrates that corporate governance can inhibit managers’perks, and corporate governance performs differently in inhibiting managers’perks in state-owned enterprises and non-state-owned enterprises.The sixth part is about research conclusion and suggestions. It provides a summary of this research, and proposes appropriate policy recommendations.It is argued that, for one thing, corporate governance can inhibit managers’ perks. To be more specific, the larger proportion of the largest shareholder, the more perks. The higher equity balance degree is, the more effective the supervision of management is. Cause the big shareholder control is dispersed, and multiple large shareholders share the control of the company. Thus it can inhibit the perks of managers. Board size is positively related to managers’perks. Due to the communication block between the board and managers, the larger size of the board, the more perks. Separation of chairman of board and CEO can better supervise the opportunistic behavior of managers. Management ownership is negatively associated with perks. Equity incentives for managers can inhibit the pursuit of more perks to some extent. Compensation of managers is negatively related to managers’perks, because managers will satisfy with enough compensation, not pursuing extensive perks. For another, in state-owned enterprises and non-state-owned enterprises, corporate governance performs differently in inhibiting managers’perks. To be more specific, in the state-owned enterprises, the size of board is positively related to managers’perks. While ownership concentration, degree of separation of ownership and leadership and managers’ perks are negatively correlated in the non-state-owned enterprises. Moreover, although the compensation of managers affects the opportunistic behavior of managers in both state-owned enterprises and non-state-owned enterprises, the effect upon those enterprises is different. In non-state-owned enterprises, the relationship between compensation and perks of managers is more significant. The empirical tests further demonstrate the main conclusions above.The main contribution of the thesis is that it studies for the first time whether and how corporate governance influences managers’perks, and compares the different impacts on state-owned enterprises and non-state-owned enterprises.