Who Can Influence Executive Compensation

Based on the background of the flourishing development of institutional investors and the great concern of the society for executive compensation,this paper explores the relationship between the monitoring fund and the executive compensation from the perspective of the investment portfolio of fund investors.This paper divides the fund investors of listed companies into two categories: monitoring fund investors and traditional fund investors.We think monitoring fund investors are more motivated to supervise listed companies and influence executive compensation level and executive "pay-performance" sensitivity.We take A-share listed companies from 2012 to 2017 as the sample for empirical test.The test results show that compared with traditional funds,monitoring fund ownership has a more significant positive effect on executive compensation level and executive "pay-performance" sensitivity.At the same time,we study the mechanism that affects the relationship between monitoring fund investors and executive compensation.According to CEO duality,the degree of marketization,industry competitiveness,we test the samples in groups.We found that monitoring fund ownership has a more significant positive effect on executive compensation when the listed companies has CEO duality.The positive effect of monitoring fund ownership on executive's "pay-performance" sensitivity is more obvious when the listed companies does not has CEO duality.When listed companies are in a fast market-oriented area and belong to a competitive industry,the positive effect of monitoring fund ownership on executive compensation level and executive "pay-performance" sensitivity is more obvious.This paper also uses PSM tendency score matching test,fixed effect model,replacement of calculation indicators and adding missing variables to test the endogeneity and robustness of the empirical results.The test results show that our empirical results are robust.This paper enriches the measurement methods of fund investors,and also enriches the relevant research on executive compensation.