| "High-price executive compensation" has always been a hot topic of public discussion.In recent years,there have been increasing reports of high executive compensation and increasing external gaps of executive compensation in the industry.The issue of efficiency and fairness of executive compensation incentives has received attention for managers,the public,and companies.Executive compensation is a key point that affects the operating efficiency of enterprises and social equity.Dozens of external pay gaps not only poses a severe challenge to the problem of income equality,but also makes it difficult for executives to find a reasonable basis and reference point for salary formulation.This paper takes the executive earnings management behavior as the breakthrough point,and examines the economic consequences of the external gaps of executive compensation based on the relationship between executive compensation external gap and earnings management.To answer the microcosmic impact of the pay gap generated in the macro environment.In this paper,we review the domestic and foreign research literature related to the external gaps in executive compensation and find that there is still a lot of room for further study on the issue of the quantitative gap between executive compensation external gaps and their economic consequences.Therefore,this article selected the listed companies in Shenzhen and Shanghai A-shares from 2008 to 2016 as the research object.Comprehensive use of social comparison theory,principal-agent theory,pay bandwagon psychological research results and manager market theory.Using external pay gap variables that take into account manager input differences,earnings management behavior and earnings-earnings management relevance are used as dependent variables to explain the earnings management behavior of compensation management incentives.The liquidity of managers in the market(industry homogeneity and the number of companies in the industry)represents the market environment of industry managers.To analyze whether the executive compensation external gap will induce earnings management behavior of the compensation contract,whether the industry manager's market environment will affect the relationship between executive compensation external gap and earnings management and whether has the significant impact.The following conclusions are drawn from the statistical methods for multiple regression:(1)Considering the executive investment differences,the higher external executive compensation gap,the more managers will have unfair and negative emotions,and in the short term they will not be able to achieve improvement in corporate performance.At this time,the stronger the degree of earnings management for executives to make up for a fair psychological gap,the higher the correlation between compensation and earnings management.The existing external gap of executive compensation in the enterprise manager market in China is unreasonable.(2)When executives' external pay gaps cause senior managers to generate negative behavior,executives tend to reduce their regulatory losses in order to maintain their reputation,and tend to adopt more concealed real earnings management methods.As the regulatory environment has become increasingly sophisticated,auditing techniques have continued to increase,and the methods of earnings manipulation that senior executives have pursued for the purpose of profit manipulation have also changed.Nowadays,compared with accrued earnings management,it is more biased towards real earnings management.(3)The higher the executives' liquidity in the manager's market,the greater the number of companies in the same industry,the higher the homogeneity,and the more opportunities the executives have to change jobs in theory.However,due to the immature manager market in China,the imperfect free circulation mechanism and reputation mechanism,the high cost of work conversion,and the opaque executive compensation information,the negative impact of the competitive pressure brought about by the high homogeneity of the industry is dominant.This will increase the degree of earnings management behavior induced by external gaps in executive compensation.The study in this paper provides new evidence points for the conclusions of the economic consequences of the external gaps in executive compensation,and also improves the study of incentives for managers of earnings management.The conclusions can enable the makers of corporate executive compensation systems to more objectively understand the impact of market compensation levels on managers.And help the regulatory authorities to more accurately identify and manage the causes of accrued earnings management and real earnings management of enterprises,and increase the pertinence and effectiveness of supervision. |
