An Empirical Study On The Relationship Between Capital Structure And Executive Compensation Of A-share Power Listed Companies

As an economic and social infrastructure with a heavy asset attribute,The power industry has long been dominated by state-owned capital,and the high growth rate is accompanied by overcapacity.The average asset-liability ratio of the five major central enterprise power generation groups of Huaneng Group,State Power Investment Group,Huadian Group,Datang Group and Guodian Group,which are more competitive,mainly climbed above 80%,much higher than other non-banking debt ratios.Poor profitability.However,the hydropower and grid companies with monopolistic attributes are basically below 60%,showing very strong profitability.The executive compensation of the two types of power group companies is basically around 800,000 yuan,but the difference is very small.Since the reform and opening up in 1978,the Chinese government has been promoting market-oriented reforms in the power industry's financing system,corporate governance,power pricing,property rights,and managers.It is still in progress.Although China's state-owned thermo-power,hydropower and power grid companies are in the power industry chain,the two types of companies have very different business models.Thermo-power is competitive,while hydropower and power grids are monopolistic.There is little research on the difference about relationship between CEO compensation and capital structure from business model.Different from the existing research in China,the research samples and object of this paper consider the particularity of China's capital market and company.The specific innovations are as follows:First,the research data of this paper is from the companies that have completed the share-trading reform in 2007-2016.Most of the study by scholars have included the reforms.There has still problems in corporate governance during this period.There are no such problems in foreign countries,but domestic research needs to consider the maturity of the capital market system.Power Listed CompaniesSecond,the research objects of this paper are state-owned enterprises,which are more in line with the role of professional managers.Overseas,listed companies have formed a relatively complete professional manager market,and listed companies are mostly managed by professional managers.In China,the founders or family members of many listed companies are the managers of the company,and they have both the manager and the owner.At this time,they are more concerned about the value of the equity held(possibly indirectly held),and the salary is insignificant compared to the value of the shares.The previous research did not take into account the existing specialities of the company group in China.The direct comparison of the company into two groups of state-owned enterprises and private enterprises may lead to unreliable conclusions.The selection of state-owned power listed companies as the research object not only excludes the impact of this particularity,but also provides some inspiration for the reform of China's state-owned power companies.Thirdly,the content of this paper is the relationship between CEO compensation and capital structure of power companies under different business models.Considering the classification of different business models of thermo-power companies,hydropower and grid companies,analyze the CEO payment and capital structure through a micro perspective.Since the two groups of power companies are similar in terms of financing channels,this comparison is reliable.In the previous literature,the differences in different business models were not considered when studying industry issues,but only a general industry classification.This paper attempts to study the relationship between CEO compensation and capital structure of power companies with different business models from a micro perspective.The full text is divided into six chapters:Chapter 1,introduces the background of this paper,significance of research,content and methods.Chapter 2,contains a review of the literature,mainly from the two dimensions of capital structure and CEO compensation,and summarizes the domestic research status,comments.Chapter3,the CEO compensation and capital structure theory.It mainly reviews the concept definition,and summarizes capital structure,CEO compensation theory and current situation of domestic power industry,laying the foundation for the research hypothesis.Chapter 4,studies design.Three research hypotheses are proposed,which illustrate the sample selection criteria,data sources,variable selection and definition,and the factor analysis method is used to synthesize the company's performance indicators.Finally,based on the research hypothesis,three regression models are constructed.Chapter5,the empirical results and analysis.The sample data of the capital structure,CEO compensation and related characteristics of China's 54 state-owned listed power companies from 2007 to 2016 are taken as the research object,and its description,statistical analysis and correlation analysis are carried out.In the selection of the model,the F test and the Hausman test were performed,showing that the fixed effect model should be used.The regression results were analyzed and the conclusions were drawn.Finally,in order to make the research reliable,this paper also made a robustness test,and the results show that the conclusion is stable and there is no significant difference.Chapter6,research conclusions and policy recommendations,found that:(1)CEO compensation in the thermo-power group,hydropower and power grid groups has a negative relationship with the company's asset-liability ratio;(2)the CEO's tenure in the thermo-power group,hydropower and power grid group has a significant strengthening effect on the relationship between CEO compensation and the company's asset-liability ratio;(3)The CEO tenure in the thermo-power group has a significant inhibitory effect on the relationship between compensation and the company's asset-liability ratio,while insignificant in the hydropower and power grid groups.Finally,this paper puts forward four suggestions:(1)speed up industrial marketization reform and supervision;(2)promote differentiated market-based compensation reform;(3)improve the internal control system;(4)diversify financing channels.