Research On The Impact Of Accounting Information Quality On Executive Compensation Performance Sensitivity

The research on the validity of executive compensation contract has been going on for a long time.In the modern corporate system,the separation of ownership and control rights leads to the principal-agent problem,which makes it vital to design effective compensation contracts and effectively motivate executives.According to the compensation contracts theory,the key to judge whether the executive compensation contract is effective is whether the executive compensation in the contract is related to the company’s performance.Accounting information plays an important role in executive compensation contracts.However,Chinese capital market and professional manager market steps late,the corporate governance mechanism is not perfect,and accounting information contains more "noise".As a result,it is of far-reaching significance to study the impact of accounting information quality on executive compensation performance sensitivity.This paper takes A-share listed companies from 2006 to 2020 as the research object.On the basis of proving the existence of executive compensation performance sensitivity,this paper studies the impact of accounting information quality on executive compensation performance sensitivity from two aspects: compulsory disclosure and voluntary disclosure.Then,it further discusses the difference between the influence of accounting information disclosed compulsively and accounting information disclosed voluntarily on executive compensation performance sensitivity under different equity characteristics.This paper draws the following conclusions:(1)Corporate performance has a significant positive impact on executive compensation.(2)The quality of accounting information disclosed compulsively has a significant positive impact on executive compensation performance sensitivity.(3)The quality of accounting information disclosed voluntarily has a significant positive impact on executive compensation performance sensitivity.(4)In non-state-owned enterprises or companies with separation of two rights,the quality of accounting information disclosed compulsively has a more significant positive impact on executive compensation performance sensitivity.(5)In state-owned enterprises or companies without separation of two rights,the quality of accounting information disclosed voluntarily has a more significant positive impact on executive compensation performance sensitivity.This paper provides a new perspective for the research on the governance role of accounting information and the performance sensitivity of executive compensation.It also deepens the research on the governance role of accounting information.In addition,it helps the company to make a more comprehensive and true evaluation of executives using accounting information based on its own equity nature and the separation of two rights in order to improve the effectiveness of executive compensation contracts and encourage management to serve the company even better.Finally,this paper also has some practical reference value for the formulation of accounting information disclosure policy.