Research On The Relationship Between Executives Explicit Incentives And Equity Agency Costs

The separation of ownership and management rights in the characteristics of modern corporate governance has led to the existence of equity agency costs for companies,and companies and the theoretical and practical world have always used explicit executive incentives as a measure to reduce the cost of equity agency.However,studies have shown that in addition to reducing the cost of equity agency,explicit incentives for executives may also increase the cost of equity agency.This paper considers that the reason for the different conclusions of the relationship between executive explicit incentives and equity agency costs may be that the existing research has been devoted to analyzing the governance effects of a single executive explicit incentive on the cost of equity agency,while ignoring the senior executives Because of the influence of the internal incentive mechanism of sexual stimulation,this paper analyzes the relationship between explicit incentives of executives and the cost of equity agency from the perspective of the internal mechanism of executive incentives for explicit incentives,and brings them into the characteristics of actual controllers and different levels of market competition.In the case of a more in-depth study,in order to provide more practical reference for China's listed companies.This paper selects the 2010-2016 data of China's A-share listed companies and empirically analyzes the status quo of executive incentives and equity agency costs and their correlation,and tests the robustness.The following conclusions are drawn:There is a significant negative correlation between executive compensation incentives and option incentives and equity agency costs.There is a significant positive correlation between executive ownership incentives and equity agency costs.From the perspective of executives' explicit incentive internal actions,senior executives hold stock incentives.The relationship between executive compensation incentives and the reduction of equity agency costs has a significant negative regulatory effect.Executive incentives for executives have a significant disruptive regulatory effect on executive compensation incentives and lower equity agency costs;from actual controllers.From the perspective of contextual factors of attributes,the executive compensation incentives and stock-holding incentives of China's state-owned listed companies have a more significant impact on equity agency costs than non-state-listed companies.Executive stock incentives and options incentives can be more significantly regulated in non-state-owned enterprises.The relationship between executive compensation incentives and equity agency costs;from the perspective of contextual factors of market competition,executives shareholder incentives Reeds can more significantly adjust the relationship between executive compensation incentives and equity agency costs in a low-competitive market;executive incentives can more significantly adjust the relationship between executive compensation incentives and equity agency costs in highly competitive markets.Through the research conclusions of this paper,in order to better explore and improve the governance function of the executive incentive system,this paper puts forward the following suggestions from the aspects of the construction of executive incentive system and the optimization of corporate governance environment.First,it is necessary to improve executive incentives.System to explore efficient incentive models.For example,vigorously promote executive compensation incentive plans;implement shadow shares in place of senior executives to encourage shareholding incentives while constraining executives' behavior;diversify incentive options for senior management options,and optimize options markets.Second,we must strengthen the quality of senior management and optimize the corporate governance environment.For example,establish a complete executive quality training system and combine it with executive assessment indicators;strengthen the effectiveness of internal compensation committees,audit committees,and independent directors,and improve the company's internal governance environment;strengthen certified public accountants,media and the public,and capital External supervision of the market,improving the company's external governance environment.