An Empirical Study On The Relationship Between Executives' Excess Compensation,Internal Control And Enterprise Performance

The separation of ownership and management leads to the principal-agent problem.From the perspective of "economic man",both parties tend to maximize their own interests.Therefore,the balance between executive compensation and corporate performance becomes a difficult problem.In recent years,the problem of excess executive compensation in state-owned enterprises has aroused widespread concern in the society.Some scholars analyze the excess executive compensation from the perspective of executive power as a result of the fraudulent use of executive power for personal gain.To this end,the state has issued a series of policies to regulate executive compensation.Although the excessive executive compensation is restrained,it also seriously hampers the enthusiasm of executives to create value for the company.Taking A-share listed companies in Shanghai and Shenzhen Stock Exchanges between 2007 and 2017 as samples,this paper studies the impact of executive excess pay on corporate performance from the perspective of executive excess pay,further takes internal control as a moderating variable,studies the moderating effect of internal control on the relationship between executive excess pay and corporate performance,and analyses the internal control over executive excess pay in different regions.In addition,with the improvement of internal control quality,the effect of executive excess pay on corporate performance may be non-linear.Therefore,this paper uses the threshold panel data model and takes internal control as the threshold variable to explore the impact of executive excess pay on corporate performance in different internal control quality intervals.Difference.The results show that: firstly,the excess executive compensation is positively correlated with corporate performance,that is,the higher the excess executive compensation,the better the performance of the enterprise.Secondly,internal control is positively correlated with enterprise performance,that is,the higher the quality of internal control,the better the performance of enterprises.Thirdly,internal control has a positive moderating effect on the relationship between excess executive compensation and corporate performance,that is,with the improvement of internal control quality,the effect of excess executive compensation on corporate performance is stronger.Fourthly,compared with the central and Western regions,the positive moderating effect of internal control on the relationship between excess executive compensation and corporate performance in the eastern region is not more obvious.Fifthly,there is a non-linear relationship between excess executive compensation and corporate performance,and there is a significant threshold effect.With the improvement of internal control quality,compared with the enterprises with lower internal control quality,when internal control is applied,it is necessary to improve internal control quality.When the system quality is promoted to the medium level,the promotion effect of executive compensation on enterprise performance decreases obviously.However,compared with the enterprises with the medium level of internal control quality,when the quality of internal control is improved to a higher level,the promotion effect of executive compensation on enterprise performance is obvious.On the basis of existing research,this paper studies the effect of executive excess pay on corporate performance.Taking internal control as a moderating variable,this paper studies the moderating effect of internal control on the relationship between executive excess pay and corporate performance,and further studies the internal control threshold effect of the relationship between executive excess pay and corporate performance by using Threshold Panel Data model.It is found that the construction of internal control plays an active role in ensuring the effectiveness of compensation contracts.The conclusion of this paper has important guiding significance for listed companies to improve salary incentive system and internal control system.