Board Characteristics And Abnormal Executive Compensation

In recent years, executive compensation has become a focus of all scholars, since management’s incentive compensation is usually regarded as an important mitigation for agency problems of corporate governance mechanisms.In earlier times, researches about executive compensation mainly focused on the relationship between executive compensation and corporate operating results. In recent decades, many scholars have switched to what is the relationship between corporate governance and executive compensation. With the media breaking the news of the astronomical salaries of more than one listed company executives, public events, academia, the corporate executive compensation, and it has set off a burst of enthusiasm, but most focused on the impact of executive compensation factors and other aspects, which is mainly to study the relationship between corporate governance and executive compensation, less specific to the Board characteristics, less than the "abnormal executive compensation. This article is to study the relationship between them and the abnormal executive compensation, aiming at regulating the issuance of executive compensation, reducing the gap between the rich and the poor, and achieving social harmony from the angle of the board characteristics.The Board characteristics are some of the features presented in the Board of Directors. On the basis of previous studies, this article has adjusted the division of the board characteristics with corresponding integration introspects:independence characteristics, incentive characteristics, structural characteristics, behavioral characteristics and heterogeneity. Abnormal executive compensation literally mean sun reasonable factors existing in the executive compensation compared to the normal executive compensation. At home and abroad there is not too much research about abnormal executive compensation, and its definition has not yet formed a unified authority conclusion today.This article, divided into five parts, discusses of abnormal executive compensation from the angle of the board characteristics.The first part of Introduction mainly elaborated the article’s research background and significance, research methods, ideas and frameworks, as well as the contribution of this study with insufficiency.The second part of the literature reviewed the authors of the Board Characteristics abnormal executive compensation, board characteristics and executive compensation literature and organization. First, the characteristics of the board of directors were further subdivided; Secondly, finishing abnormal executive compensation at home and abroad viewpoint; Finally, sort out the relationship between executive compensation and conducted a comprehensive review of the literature perspectives regarding the proportion of independent directors, two post concurrently, the stake of the Board, the annual remuneration of the Board of Directors, the remuneration and the set of the evaluation committee, board size, frequency of board meetings, the chairman of the board changes, independent director to perform their duties, the directors of the age, gender, work experience and educational background and other characteristics of departure.The third part of the theoretical analysis focused on the principal-agent theory, the manager power theory, modern organization theory and human capital theory expanded the discourse on the necessity and importance of the incentive pay of executives, characteristic of directors and executive compensation and abnormal between executive compensation phenomenon associated.The fourth part of the empirical research consists of research hypothesis, study sample, research model, variable design and empirical analysis. I assume that the independent director proportion on the basis of the previous text, the stake of the Board and the proportion of highly educated background Directors and abnormal executive compensation exist a negative correlation between board size and frequency of the annual meeting of the Board, with the abnormal executive compensation related but the direction is not clear. Selected in2007to all A-share companies listed on the Shenzhen Stock Exchange and Shanghai Stock Exchange in2010, as a sample, to learn from China’s Taiwan scholar Lin Wan Ying (2011) study method, Probit models, and learn from the existing literature control the size of the company, the stake of the largest shareholder, the Board of Supervisors of scale, asset-liability ratio, return on assets, industry characteristics and annual characteristics of the six control variables. First, I conducted descriptive statistics and Pearson correlation analysis, a preliminary analysis of the relationship between the variables; final Probit model regression, and the top three were the top three directors, supervisors, executive compensation "instead executive compensation, alternative return on assets (ROA), return on equity (ROA) of and robustness test model, the empirical results remain basically unchanged.The fifth part of the study conclusions and recommendations for the regression results were further elaborated in the conclusions, put forward relevant policy recommendations, and summed up the limitations of this study.This paper attempts to be innovative from two perspectives:1. Board Characteristics defined. Board Characteristics existing literature has not been the formation of a unified opinion domestic authoritative definition mainly have analysis and integration in East Chi (2004), Li Chang Qing (2005) and Liu Pavilion Li (2009), etc., the author of the above scholars such as the research conclusions, on characteristics of the board of directors were re-defined and divided, the characteristics of the board is divided into five areas of independence characteristics, motivational characteristics, structural characteristics, behavioral characteristics and heterogeneity. The independence of the features include independent director proportion of part-time and two hats; the incentive features include the annual monetary rewards of the stake of the Board, the Board of Directors; structural characteristics including remuneration and appraisal committee set and the size of the board; behavioral characteristics, including the frequency of meetings of the Board and Chairman of the Board change; heterogeneity characteristics including directors’age, gender, work experience and educational background. The definition contained in the board characteristics are more comprehensive in this article and focused on age, gender, work experience and educational background lights easier neglected heterogeneity. Although the division of this article is not reasonable and regulation may exist, the author is trying to break the shackles of the inertia of thinking, and also for further study in the future to provide help as much as possible.2. Concerns about the abnormal executive compensation. Many years, the academic study of executive compensation is more abundant, but seldom studied under abnormal executive compensation, but I, as a graduate, is willing to explore rustic opinion. From the angle of the board directors characteristics, this essay elaborated the relationship between executive compensations, and also study the influence on abnormal executive compensation in an empirical way. The empirical results are not entirely satisfactory, but also from the described some problems. Especially from the independent director proportion with abnormal high-heeled pay a significant negative correlation can be seen that the listed companies in China institutional imperfections of the independent director system and the functions of the Commission.