Management Power?Media Coverage And Executive Pay Stickiness

In the capital market,the information about executive compensation has always been one of the hot topics.This is mainly related to the fairness of income distribution implied by salary.According to the theory of optimal contract,as long as the amount of compensation obtained by executives is linked with performance,the agency problem between principal and agent can be effectively solved.However,in recent years,the constant exposure of the phenomenon of "Sky-high compensation" has refreshed people's views on the agency problem: the compensation contract not only failed to reduce the agency cost,but also may have evolved into the agency problem.The corresponding situation is the stickiness of executive compensation,but the optimal contract theory can not give a reasonable explanation.The theory of management power put forward by foreign scholars points out that executives have the motivation to pursue salary and welfare with their own power.And can the theory explain the stickiness of compensation in emerging market countries,that is,what is the relationship between management power and executive pay stickiness? As an important external governance mechanism,what role does media coverage play? Can it regulate the relationship between them? In fact,media coverage can be divided into two categories: negative and non negative.So,which kind of coverage is more conducive to play a regulatory role? And the difference between the two kinds of coverage in the regulatory role is mainly reflected in the state-owned enterprises or non-state-owned enterprises? Therefore,based on the sample data of China's A-share listed companies from 2012 to 2018,this paper first studies the relationship between management power and executive pay stickiness.Secondly,the adjustment degree of the two kinds of coverage is compared by the change of salary stickiness.Finally,considering the nature of property rights,we can judge which kind of enterprise the difference between the two kinds of coverage is mainly reflected in.The empirical results show that:(1)the power of management can positively promote the stickiness of executive compensation,that is,with the increase of the power in hand,executives are more likely to manipulate their own compensation,and ultimately make the stickiness of executive compensation further increase.(2)Compared with the non negative coverage,the negative coverage has a more obvious role in alleviating the relationship between management power and executive paystickiness.Although non negative coverage can also negatively regulate the relationship between management power and pay stickiness,the effect is significantly weaker than negative coverage.(3)The differences between the two types of coverage in the regulatory role are mainly reflected in the state-owned enterprises,that is,compared with non negative coverage,the advantages of negative coverage in the regulatory role are mainly reflected in the state-owned enterprises.For non-state-owned enterprises,neither of them can play a regulatory role.Finally,according to the results of empirical analysis,this paper puts forward corresponding suggestions from three aspects: effective restriction of executive power,improvement of salary incentive system and effective use of the external governance role of media coverage.