Executive Compensation, Management Power And Tax Incentives

As a means for state to participate in the distribution of the social wealth, tax is the main source of government revenue, but it is also a mandatory cost for enterprises. In order to reduce tax burden, obtain the benefits of tax saving and keep the economic resources in the enterprise, enterprises often use a variety of legal and illegal methods to avoid taxes. Different companies have different tax pressures, attitudes, tendencies, so tax aggressiveness is also different. According to the domestic and foreign scholars' s studies,it is found that there are many factors that influence corporate tax aggressive behavior, which most focus on the view of agency relationship exists between shareholders and managers. But few people do further research, this article is on the basis of the agency relationship, starting from tax aggressiveness to research the relationship between executive compensation and tax aggressiveness, However,according to the theory of management power,with the expanding of the powers of management,the phenomenon of impact on the board of directors to set compensation also increases, resulting in the ineffectiveness of optimal contract theory, management power will weaken the incentive effects of executive compensation.Furthermore, this paper also considers the influence of property difference on the relationship between executive compensation, management power and tax aggressiveness, which has a certain significance.Firstly,this paper combs the related literature on the influence factors of tax aggressiveness,and the influence factors of management power on executive compensation and its incentive effect.Based on this, this paper analyzes the relations among executive compensation,management power and tax aggressiveness,and put forward the research hypothesis.it selects the A-share listing companies listed in Shanghai and Shenzhen Stock Exchange in 2010-2014 as samples.This paper studies the influence of executive compensation on tax aggressiveness, and management power on executive compensation and its incentive effect by variable design, model construction,empirical analysis and test.As well as the relations among the three with different property rights.We draw the following conclusions:The executive compensation and tax aggressiveness was significant positive correlation;Compared with the state-ownedenterprises,positive incentive effects of executive compensation is more significant in non-state-owned enterprises.The management power weakened the positive incentive effect of executive compensation;Compared with the state-owned enterprises,the management power on executive compensation positive incentive effect of weakening effect is more significant in non-state enterprises. Basing on the above findings,this paper puts forward some relevant policy recommendations, such as weighing the executive compensation levels,giving reasonable management power, coordination of executive incentive and supervisory mechanism.