External Fairness And Goodwill Impairment Of Executive Compensation

In recent years,China’s capital market has repeatedly experienced large-scale goodwill impairment,and the risk of goodwill impairment has become the primary risk to be guarded against in China’s financial management.2021 The government work report of the National Two Sessions reiterated the need to seriously do a good job of "six stable" work and fully implement the "six protection The government’s work report for the 2021 National People’s Congress reiterated the need to conscientiously do a good job of "six stabilisation" work and fully implement the "six protection" tasks,ensure the stable operation of financial markets,and not ignore financial risks.The report to the 19 th National Congress of the CPC pointed out: "We will continue to increase labor productivity while simultaneously raising labor remuneration." Our government has continuously introduced relevant policies to realize the fair distribution of salaries in order to promote the high-quality development of our economy.At present,scholars mainly discuss the influencing factors of impairment from the perspective of "rational man" in traditional finance.Senior executives are the decision-makers of enterprise management,their personal characteristics and the existence of irrational factors will affect the decision of merger and acquisition and the subsequent impairment.Based on this,this paper chose to study the impact of external fairness of executive compensation on the impairment of corporate goodwill,takes the data of A-share listed companies from 2010 to 2021 as research samples,analyzes it by combining prospect theory and equity theory,and carries out an empirical study.This paper empirically tests the influence of external fairness of executive compensation on the impairment of corporate goodwill.The acquisition premium variable is introduced to test its intermediary effect mechanism.Meanwhile,analysts are introduced to track this variable to study its regulating effect.This paper finds that external equity of executive compensation is negatively correlated with goodwill impairment.The lower external equity of executive compensation is,the more goodwill impairment loss will be at the end of the period.M&a premium plays a partial mediating effect in the negative influence of external fairness of executive compensation on goodwill impairment;Analysts tracking this external governance mechanism can restrain the external fairness of executive compensation from promoting goodwill impairment.The correlation between external fairness of executive compensation and goodwill impairment is more significant in the context of private enterprises,low quality of internal control and large company scale.Based on the findings of this study,corresponding policy recommendations are put forward in the light of actual practice: attaching importance to the external fairness of executive remuneration;strengthening the supervision and management of corporate goodwill;improving the information disclosure system of executive remuneration within companies and establishing uniform standards for executive remuneration information disclosure;improving the governance system of listed companies,checking and balancing the power of executives and strengthening the ex-ante supervision and assessment of managers’ behavioural decisions.