Managerial Power Delegation and Efficiency Loss of Executive Compensation Incentives
Based on the manually collected and organized data on the changes in management power in the amendment announcements of the charters of listed companies from 2010 to 2019,this paper adopts a double difference method to test the impact of management power sinking based on the autonomy of the company's charter on the executive compensation.The findings show that after the management power sinking,both the executive compensation and the excess compensation are sig-nificantly increased.Specifically,when the management power sinks,the increase in executive com-pensation and excess compensation is mainly reflected in a significant increase in scale compensation(rather than performance-based compensation),while the sensitivity of the company's compensation performance significantly decreases.These empirical evidences support the management power theory.When the management power sinks,the company's on-the-job consumption increases and the internal and external salary gap widens,but the company's future business performance and market value have not significantly improved.Therefore,the decentralization of management power according to the au-tonomy of the company's charter may lead to efficiency losses in the executive compensation incen-tives.The internal and external supervision mechanisms of the company,as well as the shareholding of the management,have a restraining effect on the positive correlation between the sinking of the management power and the executive compensation.Based on the above research conclusions,when companies modify their charters to authorize the management,they should pay attention to the poten-tial rent-seeking behaviors of the executives,and achieve appropriate authorization and effective super-vision.
charter autonomymanagerial power delegationexecutive compensationexcess com-pensationefficiency loss
万方数据
维普
