Can Supervision—By—Media Restrain Excessive Executive Perks Effectively?

With the deepening degree of the marketization and the reformation of company system, there are continuous negative news about luxury perks, though the executive compensation system has already improved gradually. For example, in 2011, Sinopec spent 1.68 million on wine and China Mobile executive took bribery and so on. "Honest Look" confirms the status quo of perks has been out of control and the problem has been more serious than compensation. What’s more, perks has become the giant invisible income of executives. According to the data from SASAC, the majority of companies have perks in some extent. Because of the ambiguous discrimination of perks and the invisible management methods, there is a widespread trend of perks. In order to curb this situation, the Ministry of Finance and other departments had launched a series of laws, such as Interim Measures for the Supervision and Management of SOE Executive Perks and some relevant regulations to supervise the perks.Perks, as an imperative part of compensation contracts, which can do increase the agency cost sometimes. However, just as Wan Hualin (2007) had pointed that the perks is like a double-edged sword, which means sometimes perks can be used to increase the loyalty of workers and to cultivate a sense of belonging. In addition, it will do good to improve the whole team work efficiency. Finally, it will be good for realizing the value of the enterprises. Actually, because of strong concealment of perks and lack of strict standardization in accounting, it provides a security umbrella for those executives who want to have access to perks. Based on the double attribute of perks, this paper argues that it is necessary to distinguish the reasonable part and the excessive part. The reasonable part means it can help to improve the value of the company. The excessive part is the luxury consumption which will be harmful to the value of the company. In the long run, the excessive perks will hinder the growth of the enterprise. In addition, due to the executive perks have closed relationship with social equity, executive corruption and some sensitive problems which can attract the public attention immediately. In this process, the media plays an important role to disseminate the information. And the media pays more attention on the negative news about executive corruption and excessive perks particularly. At present, most researches focus on the laws and relevant rules which can curb perks and this article attempts to explore the inner relationship between the media negative news with excessive perks from the angle of media.Firstly, the paper makes a re-definition of perks which is divided into the reasonable parts and excessive parts. In addition, according to the previous researches, the paper puts forward some relevant assumptions based on corporate governance theory, principal-agent theory and media management theory. Then, this paper has searched the financial information from some enterprises which have gone public from 2010 to 2014 as this paper’s samples. Secondly, this paper has done a lot of detections which based on the outcome of the descriptive statistics and correlation analysis. In order to explore the difference between different property rights, this paper has tested the SOE and PE samples to find the relationship between the media monitoring and perks. Finally, based on the different background of media, this paper makes segmentation of media and it can be divided into central media and local media. By comparing the two different background media, we can easily find the difference between them which can provide effective suggestions for the future development of media.Based on the main content, there are six parts in this paper.The first part is the brief explanation. In this part, there are the meaning of the paper and some background information. What’s more, it includes some research methods and the innovative ideas. In the second part, it is a retrospect about the relative researches. There is contrast between domestic and overseas. The third part puts attention to analyze the relevant theories and list three main assumptions. The fourth part intends to design some research models which includes how to select the samples, how to collect the data source, how to set a perfect model to test these assumptions. The fifth part is the mainly about the empirical test and data analysis. In this part, there are descriptive statistics, correlation tests and empirical tests. Through these tests, we can easily find that the three assumptions are all right. The sixth part is focus on launching some useful policies and providing some practical recommendations.This paper has shown that the media supervision can successfully reduce the perks of executives. However, the negative news on SOE has less binding effect than PE. In addition, by comparing the different background newspapers, the paper has found that the local media is faster to report negative news which can be adopted by the central media in the future.