高管薪酬分散公司治理与企业绩效【外文翻译】

文献信息文献标题：Corporate Social Responsibility Performance, State Ownership and Executive Compensation: Empirical Evidence from China（企业社会责任绩效、国有制与高管薪酬：来自中国的经验证据）文献作者及出处：Rauf A, Amin K, Saleem Z. Corporate Social Responsibility Performance, State Ownership and Executive Compensation: Empirical Evidence from China[J]. Global Social Sciences Review, 2019, 4(1): 61-76.字数统计：英文3857单词，21619字符；中文7067汉字外文文献Corporate Social Responsibility Performance, State Ownership and Executive Compensation: Empirical Evidence from China Abstract This analysis focus corporate social responsibility and executive compensation in China and also tests the relationship between state possession and executive compensation in presence of CSR. The estimated results confirm our hypotheses true in the selected sample of 2011 to 2014 of China. The firms with high CSR performances positively moderate the previously negative or no relationship between state-ownership and executive compensation. Application of 2SLS and GMM guaranteed the robustness of the results to potential endogeneities.Key Words: CSR Performance; Executive Compensation; State-Ownership; Agency Theory; ChinaIntroductionThe burgeoning implications of corporate social responsibility (CSR) in the modern corporate world have stimulated the researchers to probe its nexus with different mechanism of corporate governance. CSR practices and performance in itsvarying forms, such as economic, philanthropic, ethical and legal (Hill et al., 2007) are not only influenced by board characteristics, ownership structure, and governance mechanisms but also affects these distinct features of corporations. This phenomenon, thorugh different theories i.e. agency theory (Jensen and Meckling, 1976) and stakeholder theory (Donaldson and Preston, 1995; Freeman, 1984; Michelon et al., 2013; Wood, 1991), has been analyzed by various sholars (Shahab and Ye, 2018; Shahab et al., 2018a, 2018b; Yu et al., 2017; Akisikand Gal, 2017; Yu and Rowe, 2017) in both developed and developing countries. As the debate over CSR and executive compensation relationship in developing countries is not mature therefore the consenses over the consequences and determinants of CSR has not built yet.In developed markets the wide spread between the executives and employees' compensations stirred a wave of concerns on ethical and economic grounds. The literature from developed countries claims that CSR engagement is a key factor of CEO compensation (Callan and Thomas, 2011) and executives engaged in CSR activities for increased compensation and personal reputation (Barnea and Rubin, 2010; Mahoney and Thorn, 2006). Literature also found a reverse causal relationship among CSR practices, the compensation structure of CEO (Cai et al., 2011) and different characteristics of CEO’s demographics and CSR performance (Huang, 2013). It is evident that there exists substantial association amongst corporate governance mechanisms, CSR and executive compensation (Hong et al., 2016). These imperative aspects has not been analysed by the literature so far especially in case of country like china.Keeping in view the previous research gaps, in the present study we have attempted to bring forth exciting insights from the world’s fastest-growing economy (China). In China, the state-owned firms (SOEs) constitute around two third of the total firms (Li and Zhang, 2010 and Li et al., 2013) and various state organizations are working to convince all of the firms mainly state-owned to pursue CSR activities. In October 2006, the 6th Plenum of the 16th Communist Party of China (CPC) Central Committee stated that “to build a harmonious society, China should increase the social responsibility of the citizens, business enterprises, and all kinds of otherorganizations." In September 2011, guidelines were issued by State-owned Assets Supervision and Administration Commission (SASAC) which proposed that “sustainable development should be the core of CSR, and state-owned enterprises should be harmonious in development with society and the environment” (M arquis and Qian, 2014). Still, there is a wide gap in the CSR practices and disclosure mechanism of Chinese enterprises and that of those western enterprises.Accordingly, this study aims to present an integrative model to answer the unexplored questions from the CSR-executive compensation nexus and add to the literature in following ways. First, the impact of CSR performance, state-ownership and control variables (which include both governance and firms’ variables) on executive compensation of Chinese listed firms from the year 2011-2014 are analysed to strengthen the arguments of Khana and Palepu (1997) and Altman et al (2007) that the economic, financial and governance system between developed and developing countries vary to a great extent.Second, economy dominated by state ownership reacts to the involvement of CSR practices and activities has not been analysed yet. Literature propose that SOE has no or negative effect on executive compensation in developing economies (Firth et al., 2007; Conyon & He, 2011) they are interested in non-financial objectives (See, 2009). Therefore, drawing on agency theory this study investigate how CSR activities can modify the previously examined relationship between SOE and executive compensation. Our objective is to determine whether the firms who are actively engaged in CSR activities and have significant state ownership, present the similar negative/no effect on executive compensation. Alternatively, the presence of CSR activities in SOE firms changes that relationship into a positive one, thus acting as a beneficial tool for the nexus of state ownership and executive compensation. We analysed the moderating influence of CSR performance on the nexus of state-ownership and executive compensation. The use of CSR as an interaction term is non-existent in the literature relevant to the developing countries. Such moderation effect will help in understanding how firms with state ownership and distinct governance structure will determine the executive compensation in the presence ofCSR.Third, Mahoney and Thorne (2006) state that executive compensation has a significant impact on CSR. Therefore, we argue that there might be potential reverse causality between executive compensation and CSR performance (Cai et al., 2011) which can affect the reliability of our regression results. To tackle this issue, previous literature (Cai et al., 2011) has stressed the implementation of instrument variable technique to ascertain more robust results in the developed market. Thus, to deal with the above-suggested issue and contribute more effectively, 2SLS and GMM is used. By using agency theory, our findings will shed new insights to the existing literature and will have practical implications for the regulatory bodies, government, and firms.Literature Review and Hypotheses DevelopmentCSR Performance and Executive CompensationSome early researchers (Atkinson & Galaskiewicz, 1988; Friedman, 1962; Wright & Ferris, 1997) have employed agency theories in studies related to CSR and corporate strategies primarily related to corporate boards. Similarly, some studies (e.g. Bear et al., 2010; Berrone & Gomez-Mejia, 2009; Oh et al., 2011) have discussed the positive aspects of CSR concerning the monetary and non-monetary performance of the organizations. They argued that CSR initiatives are encouraged by firms with state ownership, institutional ownership, and foreign investors as such financiers are more eager to invest in responsible and environmental-friendly companies to shun the financial menaces. Contrarily, the other scholarships provide limited evidence on the association between CSR and executive return with a particular focus on developed economies and have ignored the developing economies, e.g. Flammer et al (2017) found that corporate social responsibility astringent is dominant in production-intensive businesses and has developed over time. Hubbard et al (2017) provided empirical insights into the literature by proposing that CSR practices and performances play a vital role in the nexus among CEO's career outcomes and firm's financial performance. They empirically found that greater investment in CSR in the past, result in better financial performance with a boost in CEO’s career (ultimately inmore compensation) and vice-versa. Cai et al (2011) argued that there is a shortcoming in employing an integrated theory. The proposed two hypotheses, i.e. overinvestment and conflict-resolution hypotheses. They found empirical support only for the conflict- resolution hypothesis in USA and argued that the lag of CSR negatively determine CEO compensation (both total and cash compensation).In the light of the literature review, we infer that previous studies have been focused on developed countries, and prevailing literature has not yet studied the relationship between CSR and executive compensation from a developing economy, i.e. in particular China. This study take huge data set of Chinese listed companies to fill the gap.From the above discussion one can extract the following specific hypotheses;Hypothesis 1: There is a positive association between CSR performance and executive compensation in Chinese listed firms.State ownership, CSR performance, and Executive CompensationPrevious literature has discussed this relationship, e.g. Hong et al. (2016) concluded that the firms whose governance structure is more shareholder-friendly will be more inclined to compensate CEOs, subject to enhanced social performance outcomes of firms. They further claimed that executives’ motivation to enhance firm’s social performance increases with increase in incentives for CSR engagement or initiatives. It implies that corporate governance mechanism is a vital factor in determining the executive inducements for social activities and engagement in such social activities will not only increase the social performance but will also be favourable to shareholders. Faleye and Trahan (2011) claimed that corporate strategies which are labour and environmental-friendly, have been used by the managers and directors avoid the negative consequences of managerial extravagances at the board level. Callan and Thomas (2011) broadened this framework by investigating a multi-equation model of the executive compensation, CSR, and firm financial performance. They control for endogeneity and found a simultaneous relationship between financial and social performances. Their findings also showed CSR as an important determinant of the CEO reward. Kato and Long (2006) discussed that thepay to performance linkage is weaker for executives in firms. Firth et al. (2007) found that the corporate management mechanism have a substantial influence on CEO compensation and it is different in developed and developing countries which needs further exploration especially in developing countries. Welford (2007) claimed that good corporate governance leads to better CSR performance. He studied issues in corporate governance (specifically ownership and control) about CSR performance in Asia. He explained that the concentrated ownership by owners (which may be by shareholders or state) is the main reason for strong corporate governance in the Asian region as compared to the western region. Conyon and He (2012) found positive impact of both stock and accounting market performance on the CEO’s pay structure. They also revealed that board characteristics and ownership design also influence the equity benefits,such as equity ownership and equity grants enjoyed by CEO. Conyon and He (2011) studied corporate governance and executive compensation of Chinese firms, and consistent with agency theory. Comparing the executive pay of Chinese firms with U.S. firms, they found that the executive compensation (salaries and bonuses) in the U.S. is greater than Chinese firms.Nevertheless, most of the studies from China depict a negative or no affinity between state ownership and executive compensation as these executives are bureaucrats whose appointment is subject to a specific time span and fixed salaries. However, a strong evidence claim that the SOEs’ main interest is to pursue non-financial objectives which are stated in the contracts of CEOs (Bai & Xu, 2005) and such state-owned firms emphasize the executives to achieve those non-financial objectives keenly (See, 2009). Drawing on agency theory, we argue that the written description in executives’ contracts to pursue non- financial objectives can stimulate CEOs of such firms to engage in CSR practices and improve CSR performance to achieve not only those non-financial objectives of the firms but also to enhance their compensation.We propose our second hypothesis from the above argument and suggest that the better CSR performance engenders a moderating mechanism between the presence of state ownership in firms and executive compensation link where the previous negativeor no relationship between SOEs and executive compensation is changed due to the inclusion of CSR in the form of non-financial objectives. Our second hypothesis is as follow:Hypothesis 2: CSR performance moderates the association between state ownership and executive compensation in Chinese listed firms.MethodsDataIn China, the rating agencies started evaluating the CSR related performance-indicators of Chinese listed firms from 2010. Therefore, we employed an unbalanced panel data of 554 firms (i.e. 1946 firm years’ observations) listed on two stock exchanges in China, i.e. Shenzhen Stock Exchange (SZSE) and Shanghai Stock Exchange (SSE) from 2011 to 2014. Our initial sample includes all those firms who report CSR in the stated period. However, we used unbalanced panel due to missing observations in some particular years. China Stock Market and Accounting Research were consulted for data on executive compensation. We extract the data on CSR performance of firms from HEXUN, one of the Chinese professional financial service websites, specialized for high-end investors in China. This database evaluates all firms listed on SZSE and SSE and develops an index by ranking the CSR performance of the firms. STATA software interactive tools were used for analyzing this data, and we employed Winsorization technique to control the issues of outliers.Variables descriptionFollowing Conyon and He (2011), and Kato and Long (2006) we measured our dependent variable: executive compensation by the top three executives’ average pay which includes base salary, bonuses, and commissions in China. Like western enterprises, the data on segregated heads of CEO compensation is not available for Chinese listed firms. This variable is dealt in natural log.Corporate Social Responsibility performance: Corporate Social Responsibility performance is measured by index provided by HEXUN website (Li and Foo, 2015; Shahab et al., 2018a, 2018b). This database divides CSR into five different categories;(i) shareholder responsibility; (ii) employee responsibility; (iii) supplier; (iv) customer and consumer right responsibility; and (v) environmental responsibility and public responsibility. These five categories are further sub-divided into second (13) and third (37) class indicators. Although the typical distribution of CSR index is similar amongst the industries, each industry follows their distribution method for CSR index’s development by priority. The value of CSR index is between 1 and 100 where 1 indicates the low level of CSR and 100 means high CSR.State Ownership: Hardly a study can be found that considered the importance state- ownership variable affecting executive compensation via an interaction of these variables with CSR performance.Therefore in case of this study SOE is measured by dummy wher it is 1 for state-ownership and 0 otherwise.Control Variables: Board size (Cai et al,, 2011) taken in log, board independence (Conyon and He, 2011) measured in % age f outside directives on the board, CEO duality (Firth et al., 2007) is proxy by dummy, CEO age (He, 2008) is taken in years, firm size (Kang, 2013) is calculated by number of employees in a firm, Return on Assets (Cai et al., 2011) is the income before extraordinary items divided by total assets of the firm, firm age (Gomez-Mejia et al., 2003) is calculated as the year that has been elapsed since the foundation of the firm and dividend (Bhattacharyya et al., 2004) used as a dummy variable.Econometric ModelThe data period of our study ranges from 2011 to 2014. Since there are many observations per firm in our data, therefore, unobserved heterogeneity was an issue. We checked the problem of heteroskedasticity in our data by applying Wald test suggested by Baum (2001), and we obtained a significant probability results. The autocorrelation in data was tested by Wooldridge (2002) technique, and we also got significant value. Furthermore, we also checked the within and between variation in our data. The findings showed that on average the value of between variations was greater than within variation in our variables. Cameron and Trivedi (2010, pp-607) say that if between effect values are greater than within variation then Hausman test becomes inconclusive and fixed effect results are inconsistent. Therefore, to tacklethese problems, we used panel generalized least square (GLS). We employ the following econometric model in our analysis:Where "i" shows the firm and "t" represent the period, while, the rest of the variables are described in detail in variable section and appendix (A).ResultsDescriptive StatisticsTable 1 displayed the descriptive statistics where the average value of executive compensation is 798000 with a standard deviation of 805000. It represents quite a high mean value for the CEO compensation. 37.11 is the average for CSR with 11.33 standard deviation. This suggest poor trend in CSR performance in comparison to the highest values of CSR performance in developed countries. The mean value of state ownership is 63 percent, confirming the claim of Li and Zhang (2010) by arguing that more than 60% firms in China are state-owned. Mean value of board size is almost near to 10 while board independence value shows that approximately 1/3 of the board associates in Chinese firms are independent. The values of CEO duality show that the culture of the dual role of the CEO is less evident in China, and mostly CEO and chairman of the board hold separate offices.Table 1. Descriptive StatisticsAuthor’s CalculationsTable 2 depicts the values for correlation and Variance Inflated Factors. CSR and rest of the other variables has substantial correlation with executive compensation. The values of VIF are well below the standard threshold of 10 in our study.Table 2. Correlation and VIFRegression ResultsIn the first model, we included our independent variable (CSR performance) to test the first hypothesis by checking its impact on executive compensation (See table 3). CSR performance is substantial and suggest that 1% change in CSR performance changes the executive compensation by 0.493%. It is a strong evidence in support of our first hypothesis. Our findings are in coherence with the previous literature (Barnea and Rubin, 2010; Callan and Thomas, 2011; Mahoney and Thorn, 2006) which claimed that engagement in CSR practices and enhanced CSR performance increase executive compensation. In the second model, we incorporated all the other control variables including state ownership and examined the effect of CSR performance on executive compensation to test our first hypothesis in the presence of control variables. We found significant results for CSR performance here too (See Table 3).In the model 2 we found inverse relation between SOE and executive compensation (See Table 3). This negative relationship has been discussed in someprevious studies in Chinese context (Conyon & He, 2011). They argued that due to increased involvement of the state in firms, the executive compensation of CEOs is adversely affected and a negative relationship exists between SOE and executive compensation. Further, we followed Li and Zhang (2010) that more than 60% Chinese firms are state-owned, and this study found that CSR performance moderates the relationship between SOE and executive compensation. Therefore, we developed the interaction of state-owned firms and CSR in model 3 to check how the combination of these two (SOE×CSR) affects executive compensation. Model 3 depicts a positive and significant (at 1%) coefficient of 0.120 for our proposed interaction term, i.e. SOE×CSR. That shows that greater is the CSR performance more will be the association with executive compensation.Lastly, in model 2 and model 4 of table 3, we included the control variables and results support our hypothesis of their relation with executive compensation. The findings of the firm characteristics control variables (size, ROA, firm and dividend pay-out) also suggest that these variables increase executive compensation.Table 3. Generalized Least Squares (GLS) Estimates for Effect of CSR Performance, CorporateGovernance on CEO CompensationEndogeneityThe overall results are quite meaningful. However, there might be inverse causation and omitted variable biasness in the model. To test this we employed 2SLS and GMM techniques to reduce and tackle the potential problem of endogeneity. Following Cai et al., (2011); Shahab et al., (2018a, 2018b) we used industry-median CSR as an instrumental variable (IV) for CSR performance. CSR performance is different from industry to industry, (McWilliam and Siegel, 2001; Waddock and Graves, 1997). Therefore, we estimated industry-median CSR as an IV. (See Table 4). The outcome of 2SLS and GMM two-step shows that industry median CSR is positively associated with CSR index at 1% level by controlling the effect of governance and firm-specific characteristics and at 10% level of significance on total executive compensation. The validity of our instrumental variable is tested through F-stat test suggested by (Staiger and Stock, 1997) and found that the value of the instrumental variable was greater than 10 (value less than 10 represent weak instrument) which is considered as a strong instrument.Table 4. Endogeneity Results for effect of CSR performance, Corporate Governance on CEOcompensationDiscussionThe purpose of this study is to test the relationship between CSR performance, state ownership and executive compensation in China. Although, sufficient amount of literature is available in developed economies by testing the relationship between CSR and executive compensation which is largely based on two opposing theories namely agency theory and stakeholder theory (Freeman, 1984; Jensen & Meckling, 1976). Li and Zhang (2010) argued that Chinese government own more than 60 percent of the firms. Firth et al. (2007) suggested that the structure of the executive compensation is quite different in China and CEO of Chinese state-owned firms are state bureaucrats who are hired for a specific time- period and are entitled to a fixed salary. Bai and Xu (2005) and See (2009) argue that SOEs in China are interested in achieving non-financial objectives and these objectives are mentioned in CEO contract. We explored and provided empirical evidence on this interesting research gap by analysing the moderating role of CSR performance on the inconclusive relationship between state ownership and executive compensation. We explored these two research questions by empirically testing our proposed hypotheses. The findings based on generalized least squares (GLS), two-stage least squares (2SLS) and GMM, all provide significant evidence for our claim by drawing on extensive data-set from Chinese firms. Both of our hypothesis were supported by data. Our findingscontribute to the existing literature by shedding new insights from the perspective of the interaction effect of CSR performance on the nexus between SOE and executive compensation.ConclusionThis study analyzed the impacts of CSR performance on compensation of CEOs by drawing on a longitudinal sample of Chinese listed firms. We develop an argument that CSR performance not only determines the executive compensations in Chinese firms but also influence the connection between state ownership and compensation structure. Chinese firms are characterized by the dominance of the state ownership over the decades due to the complex structure of controlled Chinese economy in comparison to the free economies of the western world. This study bridge the existing gap in research on the moderating role of CSR performance between the state ownership and executive compensation. Our findings are pertinent to both theory and practice. Given the motivation of increased incentives or compensation, executives will be inclined to put more efforts in activities related to CSR and social welfare. We shed new acumens to the literature by empirically proving that independent ownership of Chinese government has a negative or no effect on firm’s compensation structure, however, if CSR-performance is established as the missing link in the chain, the outcomes will be changed. In China, the role of the state is dominant in firms and CEOs are either part of the state councils or have political ties (Firth et al., 2007; You & Du, 2012). We claim that if the government puts more focus on CSR practices and directs the CEOs to enhance the CSR performance, the increased CSR level will lead to an increase in CEO compensation structure. This study has practical implications for the practitioners by proposing to introduce a CSR-performance related system, where the enhancement in financial benefits of CEOs is related with the CSR enactment of the firm.中文译文企业社会责任绩效、国有制与高管薪酬：来自中国的经验证据摘要本文以中国企业社会责任和高管薪酬为研究对象，检验了企业社会责任存在下的国有制与高管薪酬之间的关系。

The existence of an agency problem in a corporation due to the separation of ownership and control has been widely studied in literatures. This paper examines the effects of management compensation schemes on corporate investment decisions. This paper is significant because it helps to understand the relationship between them. This understandings allow the design of an optimal management compensation scheme to induce the manager to act towards the goals and best interests of the company. Grossman and Hart (1983) investigate the principal agency problem. Since the actions of the agent are unobservable and the first best course of actions can not be achieved, Grossman and Hart show that optimal management compensation scheme should be adopted to induce the manager to choose the second best course of actions. Besides management compensation schemes, other means to alleviate the agency problems are also explored. Fama and Jensen (1983) suggest two ways for reducing the agency problem: competitive market mechanisms and direct contractual provisions. Manne (1965) argues that a market mechanism such as the threat of a takeover provided by the market can be used for corporate control. "Ex-post settling up" by the managerial labour market can also discipline managers and induce them to pursue the interests of shareholders. Fama (1980) shows that if managerial labour markets function properly, and if the deviation of the firm's actual performance from stockholders' optimum is settled up in managers' compensation, then the agency cost will be fully borne by the agent (manager).The theoretical arguments of Jensen and Meckling (1976) and Haugen and Senbet (1981), and empirical evidence of Amihud andLev (1981), Walking and Long (1984), Agrawal and Mandelker (1985), andBenston (1985), among others, suggest that managers' holding of common stock and stock options have an important effect on managerial incentives. For example, Benston finds that changes in the value of managers' stock holdings are larger than their annual employment income. Agrawal and Mandelker find that executive security holdings have a role in reducing agency problems. This implies that the share holdings and stock options of the managers are likely to affect the corporate investment decisions. A typical management scheme consists of flat salary, bonus payment and stock options. However, the studies, so far, only provide links between the stock options and corporate investment decisions. There are few evidences that the compensation schemes may have impacts on the corporate investment decisions. This paper aims to provide a theoretical framework to study the effects of management compensation schemes on the corporate investment decisions. Assuming that the compensation schemes consist of flat salary, bonus payment, and stock options, I first examine the effects of alternative compensation schemeson corporate investment decisions under all-equity financing. Secondly, I examine the issue in a setting where a firm relies on debt financing. Briefly speaking, the findings are consistent with Amihud and Lev's results. Managers who have high shareholdings and rewarded by intensive profit sharing ratio tend to underinvest.However, the underinvestment problem can be mitigated by increasing the financial leverage. The remainder of this paper is organised as follows. Section II presents the model. Section HI discusses the managerial incentives under all-equity financing. Section IV examines the managerial incentives under debt financing. Section V discusses the empirical implications and presents the conclusions of the study.I consider a three-date two-period model. At time t0, a firm is established and goes public. There are now two kinds of owners in the firm, namely, the controlling shareholder and the atomistic shareholders. The proceeds from initial public offering are invested in some risky assets which generate an intermediate earnings, I, at t,. At the beginning, the firm also decides its financial structure. A manager is also hired to operate the firm at this time. The manager is entitled to hold a fraction of the firm's common stocks and stock options, a (where 0<a<l), at the beginning of the first period. At time t,, the firm receives intermediate earnings, denoted by I, from the initial asset. At the same time, a new project investment is available to the firm. For simplicity, the model assumes that the firm needs all the intermediate earnings, I, to invest in the new project. If the project is accepted at t,, it produces a stochastic earnings Y in t2, such that Y={I+X, I-X}, with Prob[Y=I+X] = p and Prob[Y=I-X] = 1-p, respectively. The probability, p, is a uniform density function with an interval ranged from 0 to 1. Initially, the model also assumes that the net earnings, X, is less than initial investment, I. This assumption is reasonable since most of the investment can not earn a more than 100% rate of return. Later, this assumption is relaxed to investigate the effect of the extraordinarily profitable investment on the results. For simplicity, It is also assumed that there is no time value for the money and no dividend will be paid before t2. If the project is rejected at t,, the intermediate earnings, I, will be kept in the firm and its value at t2 will be equal to I. Effects of Management Compensation Schemes on Corporate Investment Decision Overinvestment versus UnderinvestmentA risk neutral investor should invest in a new project if it generates a positiexpected payoff. If the payoff is normally or symmetrically distributed, tinvestor should invest whenever the probability of making a positive earninggreater than 0.5. The minimum level of probability for making an investment the neutral investor is known as the cut-off probability. The project will generzero expected payoff at a cut-off probability. If the investor invests only in tprojects with the cut-off probability greater than 0.5, then the investor tendsinvest in the less risky projects and this is known as the underinvestment. Ifinvestor invests the projects with a cut-off probability less than 0.5, then tinvestor tends to invest in more risky projects and this is known as thoverinvestment. In the paper, it is assumed that the atomistic shareholders risk neutral, the manager and controlling shareholder are risk averse.It has been argued that risk-reduction activities are considered as managerial perquisites in the context of the agency cost model. Managers tend to engage in these risk-reduction activities to decrease their largely undiversifiable "employment risk" (Amihud and Lev 1981). The finding in this paper is consistent with Amihud and Lev's empirical result. Managers tend to underinvest when they have higher shareholdings and larger profit sharing percentage. This result is independent of the level of debt financing. Although the paper can not predict the manager's action when he has a large profit sharing percentage and the profit cashflow has high variance (X > I), it shows that the manager with high shareholding will underinvest in the project. This is inconsistent with the best interests of the atomistic shareholders. However, the underinvestment problem can be mitigated by increasing the financial leverage.The results and findings in this paper provides several testable hypotheses forfuture research. If the managers underinvest in the projects, the company willunderperform in long run. Thus the earnings can be used as a proxy forunderinvestment, and a negative relationship between earningsandmanagement shareholdings, stock options or profit sharing ratio is expected.As the underinvestment problem can be alleviated by increasing the financialleverage, a positive relationship between earnings and financial leverage isexpected.在一个公司由于所有权和控制权的分离的代理问题存在的文献中得到了广泛的研究。

文献出处：Asia Pacific Journal of Management volume 36, pages1111–1164(2019)原文：Interactive effects of executive compensation, firm performance and corporate governance: Evidence from an Asian marketAbstract：Much of the management compensation literature focuses either on the level and structure of executives’ pay or the pay-for-performance sensitivity in a set of corporate governance structure in the Western economies. In this study, we examine the interactive effect of executive compensation, firm performance and corporate governance in different institutional and governance settings of an emerging market economy. Capturing monitoring and incentive alignment aspects as suggested in agency theory, we argue that in a markedly different executive compensation system in Thailand, the interrelationships between executive compensation, firm performance and corporate governance would exhibit some similarities to those found in developed economies. While there remains sparse research on how these relationships operate in Thailand, using data for 432 publicly listed Thai firms between 2000 and 2011, we find evidence of a reciprocal positive significant relationship between compensation and performance, as well as between corporate governance and performance. However, a reciprocal relationship is not found between corporate governance and compensation, which shows a mono-directional positive significant relationship running from corporate governance to compensation. These findings show similarities with those of developed economies and provide support for the need for an effective governance system to determine optimal executive compensation that will enhance firm performance and value. Our findings thus add some potentially noteworthy dimensions to the compensation literature that are especially important to policy makers and other stakeholders, and aiming to shape an optimal governance system in the emerging markets around the world.The relationship between executive compensation, firm performance andcorporate governance is a topical research area in contemporary governance literature. As predicted by agency theory, governance scholars have long proposed methods for monitoring and designing incentive alignment for executive compensation contracts in modern corporations to address agency problems, whereby ownership is separated from control (Jensen & Meckling, 1976; Sanchez-Marin & Baixauli-Soler, 2014). Much of the literature on management compensation focuses either on the level and structure of executive compensation or compensation-for-performance sensitivity in a set of corporate governance structures in Western economies (Core, Holthausen, & Larcker, 1999; Murphy, 1999; Bryan, Hwang, & Lilien, 2000; Frydman & Saks, 2010a; Grundy & Li, 2010; Goergen & Renneboog, 2011; Pepper, Gore, & Crossman, 2013; Reddy, Abidin, & You, 2015). Other studies highlight the mono-directional relationship between firm performance and executive compensation, between internal governance mechanisms and firm performance, and between internal corporate governance and executive compensation (Cyert, Sok-Hyon, & Kumar, 2002; Coles, Daniel, & Naveen, 2008; Lee, Lev, & Yeo, 2008; Sapp, 2008; Ramdani & Witteloostuijn, 2010; Conyon & He, 2011; Ozkan, 2011;Wintoki, Linck, & Netter, 2012; Schultz, Tian, & Twite, 2013).While a few studies explore the ‘bi-directional’ relationships between firm performance and executive compensation with complementary corporate governance mechanisms (e.g. Lee et al., 2008; Huang & Chen, 2010; Smirnova & Zavertiaeva, 2017; Buachoom, 2017), only one study uses 1 year contemporaneous data and a three stage least squared (3SLS) approach to investigate the ‘tri-directional’ relationships between executive compensation, firm performance and corporate governance in the South African market (e.g. Ntim, Lindop, Osei, & Thomas, 2015). Despite the voluminous research in this field, the extant literature reports mixed and inconclusive findings and there is a lack of clear evidence of robust relationships. The diversity and inconsistencies in the empirical findings are possibly due to not addressing the causal relationships between the governance mechanisms that are endogenously determined in a firm’s contracting and operating environments (Liu, Miletkov, Wei, & Yang, 2015) and to differences in country-specific institutionalfactors/characteristics and methodological approaches/choices (i.e. assumptions and hypotheses adopted, sample periods and size, and variables selected etc.) adopted by researchers (Farooque, 2010). However, the tri-directional (i.e. simultaneous/causal/endogenous) relationships between compensation, performance and governance have never been investigated in the literature using the dynamic panel generalized method of moments (GMM).In this paper, we investigate the reciprocal and dynamic relationships between executive compensation, firm performance and corporate governance in listed firms in Thailand – an Asian emerging market.Footnote1 Unlike prior studies, we attempt to provide a more nuanced view of the broader interactive (i.e. tri-directional) relationships between executive compensation, firm performance and corporate governance in Thailand. In fact, the issue of interactive relationships between them is heavily under researched in the literature, both in developed and emerging-market countries. Compared to Western countries, emerging countries typically have distinct institutional and governance characteristics, along with less developed legal and other public institutions and enforcement mechanisms for the protection of investor rights. Our study is largely motivated by the fact that Thailand has a poor institutional environment with weak legal rights and weak investor protection. Although Thailand adopted the key elements of the corporate governance principles of OECD countries after the Asian financial crisis in 1997, compared to the U.S. and other OECD countries, Thailand typically has a less-developed and weaker institutional environment where protection of investor rights is poor. As a result, minority shareholders are less well protected from expropriation by controlling shareholders. Therefore, it is unclear whether the relationships between executive compensation, firm performance and corporate governance in prior studies can be generalised to Thailand due to the unique characteristics of its listed firms that are derived from its development status, social background and political environment. To date, few studies have examined the relationship between corporate governance and firm performance in Thailand, as wellas the success of the corporate governance system in protecting shareholders’ interests (Alba, Claessens, & Djankov, 1998; Wiwattanakantang, 2001; Kim, Kitsabunnarat, & Nofsinger, 2004; Yammeesri & Herath, 2010; Meeamol, Rodpetch, Rueangsuwan, & Lin, 2011). The current study attempts to fill this research gap by examining the interrelationships between executive compensation, firm performance and corporate governance in Thai listed firms.Theory, literature and hypotheses：Theoretical perspectiveAlthough the vast majority of the literature grounded in agency theory reports that the agency problem may arise between principals and agents (Type I), a limited yet growing stand of studies show that conflicts between principals and principals (Type II) are also common in certain contexts, particularly in emerging markets. Agency theory explains that when control is separated from ownership, it generally leads to some conflicts of interest between owners and executives or agents, as well as between majority/controlling shareholders and minority shareholders, especially in the case where some majority shareholders become executives of the firm (Anderson et al., 2007; Hansmann & Kraakman, 2004; Jensen & Meckling, 1976; Shleifer & Vishny, 1997). Shleifer and Vishny (1997) contend that the private benefits from control rights (opportunism) are frequent manifestations of the agency problem that need to be addressed. Both types of agency problem typically incur huge costs to corporations that result from the controller’s private benefits being detrimental to the value of the firm. To protect the interests of owners, to ensure interest alignment and to deter the non-stewardship behaviour of the controlling party, agency theory suggests that an effective governance system is a suitable strategy for reducing agency costs (Conheady, McIlkenny, Opong, & Pignatel, 2015). That is, in order to enhance performance, firms need to establish some governance mechanisms as a monitoring system (for protecting owners’ interest) and incentive (for convergence of interest) instruments to mitigate conflicts of interest among participants of the firm (Daily, Dalton, & Cannella, 2003). Corporate governance protects shareholders’ interests by setting up these mechanisms to effectively reduce the impact of the agency problem(Nam & Nam, 2004; Velnampy, 2013). There are two strategies to address conflicts, ‘regulatory’ and ‘governance’: regulatory strategies rely on rules, standards, or laws to eliminate the conflicts between agents and principals of the firm, and governance strategies include ‘monitoring’ and ‘incentive’ provisions (Hansmann & Kraakman, 2004).译文：高管薪酬、公司绩效与公司治理的互动效应:来自亚洲市场的证据摘要：许多管理薪酬文献关注的要么是高管薪酬的水平和结构，要么是西方经济体一套公司治理结构中的绩效薪酬敏感性。

文献出处: Firth M. The study on operating performance of listed companies and executive compensation incentive [J]. Journal of Corporate Finance, 2015，12（5）41-51.原文The study on operating performance of listed companies and executive compensationincentiveFirth MAbstractExecutive compensation problems is the result of modern enterprise ownership and control separated, target inconsistency exists between the owners and executives, the problem such as asymmetric information, the complexity and uncertainty of modern enterprise operation is exacerbated by the seriousness of this problem, and through the contract signed with executive compensation performance, design and implement a good compensation plan can effectively solve the above problems. In today's knowledge economy, the competition between enterprises is actually the competition between talents, executives, especially excellent executives has become the core of enterprise resources, in view of the particularity of human capital of executives, executives how to effectively motivate, attract and promote the interests of the enterprise has become the key to enterprise development, and executive pay is playing such a role.Keywords: Executive compensation, Business performance, Listed Company1 IntroductionSeparate ownership and control is modern enterprise the most significant characteristics (Bale and Means, 1932).The shareholders of the owners in an enterprise have the final property ownership and the residual claims, but often there is no direct management control. Business management on behalf of the owner of control, but don't take the final decision. In the case of two rights separation is as the main body of the ownership as the main operational control shareholders and the enterprise management to form a layer between the principal-agent relationships. According to rational economic man hypothesis, the principal (owner) and the agent(management) have different between the objective function, at the same time, there exists a phenomenon of information asymmetry, the company's senior managers there is power and ability to implement on-the-job consumption "opportunistic behavior", which came at the expense of the interests of the owners at the expense of, is also the focus of the agency cost, reflect, it requires enterprises to establish an effective mechanism of incentive and constraint. By the implementation of these mechanisms can excite the work enthusiasms of agent, and can minimize the agency cost of the enterprise, so as to realize the "win-win" between principal and agent. Human society has begun to enter the knowledge economy era, the executives with high and new technical knowledge and skills has become the key to the development of enterprises, enterprises in the market competition is talented person's competition, in today's increasingly internationalized talent flow speed and, utmost respect talented person, is the key to enterprises in the competition occupy the initiative. Therefore, the enterprise owners how to through a set of incentive constraint mechanism to arouse the enthusiasm of executives, minimize agency costs, has become the key problem in the principal-agent relationship.2 Literature reviewIn the 90 s and 1980 s executive compensation has become an important field of academic research, the current executive compensation research literature is largely based on agency theory as the theoretical basis; it requires managers pay package design should make the interests of the managers consistent with the interests of shareholders. Multiple theory school of scholars use all kinds of data on compensation performance problems made all kinds of inspection. But neither empirical results are consistent with theoretical predictions, there is conflict between each other. Such as Belkaoui and Picur (1993), Koehhar and Levitas (1998) and Gray and Canella (1997) study showed that the correlation coefficient between CEO pay and company size to 0.1 at lower, the level of 0.110 and 0.170, and Boyd (1994), Finke1SteinandB.Yd (1998) and Sander and Carpenter (1998) argues that between the correlation coefficient is 0.62, 0.50 and 0.42.The same conflict results also exist in the research about the relation between pay performance. Like Finkelstein and Boyd (1998) foundthat return on equity (ROE) with monetary compensation and long-term returns between the correlation coefficient is 0.13 and 2.03 respectively; Johnson (1982) found that the correlation coefficient of 0.003.And Belliveau, Reilly and Wade (1996) found that CEO pay with ROE correlation coefficient of 0.410.Gomez Mejia (1994), the empirical study summarized: "although the empirical study of CEO pay a dime a dozen, but we know very little about executive remuneration or. “Many causes of the difference of the results of the study: the different data sources, different statistical techniques, different samples and different control variables, etc.Most of the empirical study in the United States listed companies as samples, mainly to pay as the research object, and given priority to with big companies. In the empirical study, Jensen and Murphy (1990) widely cited in the literature, since 90, and most of the empirical research in accordance with its research paradigm. In this article has pioneering meaning in the literature, they estimated the 1295 companies between 1974 and 1986 of 10400 senior managers compensation performance sensitivity, results show that the shareholder wealth of $1000 per change, CEO of wealth will be $3.25 move together. Lippert and Moore (1994) found that the pay performance sensitivity significantly negative correlation with growth, industry control, scale, and with the internal and the institutional investors holding and the term is not relevant. LIPPert and Moore (1995) found that the pay performance sensitivity to low the company has more independent directors or stronger shareholder control. MeConaughy and Mishra (1996) found that sensitivity associated with the company's future performance. The research is on compensation performance sensitivity calculation with Jensen and Murhpy computing (1990).With Jensen and Murhpy (1990) study of pay levels are different. Other documents against U.S. companies pay structures were studied. Genhart and Milkovich (1990) analysis of the more than 200 enterprises, 14000 senior and mid-level managers' pay, found that managers' pay and performance related and wages are not related. Their results also showed that mixed compensation levels and future profitability is related. Their contribution is caused people's understanding to pay structure. Similarly, Leonard (1990) have found S0 s long-term incentive plans ofthe company than the company has a long-term incentive plans, there are a higher return on equity (ROE).Hamid Mehran (1995) on a random sample of 153 manufacturing companies in 1979-1980 executive pay the inspection support incentive compensation claims, but also shows the level of motivation rather than the form of motivation to inspire the motivation of managers to increase the value of the company. Corporate performance with management ownership and equity incentive is in proportion to the total compensation level of positive correlation. He also found that equity-based compensation in the company of outside directors more applied more widely. In the end or by outside big shareholders higher insider ownership of company Ricky is in less equity compensation applications.3 Theoretical foundation of the executive compensation3.1 The principal-agent theoryIn the early days of the private enterprise, the enterprise owners or operators of the two functions, so as long as the owners are rational economic man, he will actively work for their own enterprise profit maximization, at the same time as the enterprise risk takers, he will be careful decisions, try to avoid risk. In classical enterprises, therefore, there is no power shortage and behavior distortion problem. However, with the deepening of socialized big division of labor, the production of modern enterprise system, enterprise's ownership and operation separate, its separation and led to the emergence of the principal and agent relationship, both are driven by their own interests, as the manager of the enterprise owners want as agent of the principal researchers to their own interests targeting action in accordance with the owners. And managers also is own expected utility maximization as the goal, so that both the goal of the inconsistency.3.2 The human capital theoryFrom the Angle of economics to study the compensation problem, main is to pay as senior executives in the Labor market price. In labor economics, the compensation decision mechanism on the Labor market mainly is the human capital theory. The economic activities of listed companies in the final analysis is conducted by people, the economic efficiency of listed companies in the final analysis depends on people'senthusiasm. Economic history shows that, under different institutional arrangements, the person of ability and hard work, especially the potential and creativity is the fundamental symbol of success for an enterprise system is good or bad. Therefore, economic efficiency of listed companies, the human capital property rights problems and natural economic behavior is the foundation of can't avoid. Property rights established the significance, is to make the economic behavior of the internalization of external effects, so as to produce the stimulation of strong momentum. A property rights system, therefore, the strength of the economic incentive function, mainly with the efforts of the economic subject is associated with the proximity of remuneration. Top management is the most important role in the development of modern enterprises, executive personnel is the enterprise decision makers, leaders and commanders, is the soul of the enterprise, is a leader in the development of enterprises, therefore is also an important force in China's economic and social development. Grew up in a special environment during the transition period of our country in the top management, than the business operators in the market economy country pressure is bigger, heavier burden. Especially the burden of the senior executives of state-owned enterprises with the development of the enterprise solution and two pairs of heavy burden, they want to pay more than the number of times the energy often, previously unimaginable responsibility and risk. Therefore, should recognize the importance of enterprise senior management personnel. Establish training, selection and use of enterprise management mechanism, giving them reasonable compensation.3.3 Equity theoryProblems from the Angle of psychology to study senior managers' pay mainly will be paid as a method that can meet the demand of senior executives inner and elements, to encourage executives to work enthusiasm and initiative, to improve executive performance from the individual level. In the psychology of motivation theory, the design of compensation and compensation management is based on the theory of influential Stacy Adams equity theory. Adams fair theory, the staff would first think about the ratio of their income to pay, and then will his income pay comparing with relevant income pay others. If employees feel him with others of thesame, the ratio of thought is to the state fair. If both feel not the same, the ratio of injustice are produced, namely, they may think their income is too low or too high. After this injustice, the staff will try to correct it.3.4 Strategic compensation theoriesTo think from the perspective of management, enterprises pay problem, more attention is pay management support for the enterprise strategic goals, namely how to through the compensation system to effectively help enterprises to gain a competitive advantage. About compensation management how to support the enterprise strategic target, this is the main content of the strategic compensation system design. The so-called strategic compensation, it is to point to will pay up to the enterprise strategic level, to thinking through what kind of compensation policies and compensation management system to support enterprise competitive strategy, and help enterprises to gain competitive advantage.4 The design principle of executive compensation system4.1 Principles of pay and performanceOptimal executive compensation design is the executive compensation and its operation performance, the compensation depends on the company's operating results, the design should follow the principle of the main executive compensation scheme. This principle is the principle of balance between the interests of the owner and operator. Because follow this principle, the owner and operator revenue the stand or fall of same direction as the firm's performance. Business is business risk, managers' compensation and corporate business performance has a direct relationship. Considering the operators are people too, also want to maintain family and their own survival. Considering the uncertainties of doing business at the same time, if the executive compensation and its business performance, completely will take too much risk. As a result, the executive compensation can be divided into two parts: part of the fixed income, the amount is able to maintain their personal and family life, have insurance effect. Part is risk income, completely and enterprise performance, good management can be even more greatly than the fixed income part, make its income risk, incentive role.4.2 Effective incentive principlesModern enterprise system, the organization (shareholders) and individual (senior management) is a kind of principal-agent relationship. Incentive is to strengthen and accordance of individual behavior, organizational goals, in other words, is to guide individual behavior maximize the development to achieve organizational goals. Due to corporate executives is a special company employees, has the position of privilege, enjoy "on-the-job consumption", it brought outside the regular salary incentive to executives to meet the material benefits, this need to some extent, belongs to the fair in Adams fair theory. However, in many state-owned enterprises, on-the-job consumption often goes far beyond a reasonable level, showing a high cost of self-motivation. And stands in stark contrast to the executive pay, some executive’s on-the-job consumption optional the gender is strong, too much abuse, even in a state of out of control. Has issued relevant laws and regulations, shall be forbidden.4.3 Effective restriction principleExecutives is an enterprise's decision-making and operators directly, plays an vital role in the fate of the enterprise, if in the design of enterprise organization system, lack of necessary and effective supervision and restriction mechanism, will likely agent risk. On entrepreneur behavior with some restrictions, these constraints are usually the behavior rule, violating these rules will be punished. Constraint mechanism has defined the entrepreneur behavior, the role of maintaining the order of economic activities, for the standardization of the enterprise behavior, economic and social benign operation has an indispensable positive function.译文上市企业经营绩效与高管薪酬激励研究Firth M摘要高管薪酬问题的产生源于现代企业所有权和控制权的相互分离，所有者与公司高管之间存在着目标不一致、信息不对称等问题，现代企业经营的复杂性和不确定性更是加剧了这一问题的严重性，而通过与高管签订薪酬绩效契约，设计和执行一份良好的薪酬方案可以有效地解决上述问题。

外文翻译原文Salary affect how performanceMaterial Source：Executive Compensation; 2010/2011 Supplement, Author：ModernHealth The SEC has amended its disclosure rules to require, among other matters, a discussion about a company’s compensation policies and pra ctices for all employees if they create risks that are “reasonably likely” to have a material adverse effect on the company, taking into account program features and other factors that mitigate or counteract such risks.The SEC referred in adopting the amendments, indicates that the “reasonably likely” is higher than “possible” but lower than “more likely than not.”That said, a conclusion that the disclosure trigger is not met necessarily rests on an assessment of the balance of risk and reward implied by the company’s compensation program design and incentives, taken as a whole. As with many SEC rules in the post-SOX era, process will be key. A predicate for analyzing the disclosure question will be an inventory and review of the operation of compensation programs for all employees, which should be undertaken promptly in light of the effective date of the rules.In light of regulatory and investor interest arising out of the turbulent climate of 2009, we believe that a focus on the relationship between compensation and risk-at the executive and broad-based levels—will continue. Because this relationship may not always be obvious, even though it is implicit in virtually all significant compensation decisions, we suggest below practical considerations relevant to compensation committee deliberations about these matters.Core Compensation Committee Responsibilities and Risk Compensation committees have four principal responsibilities that intersect with risk, as discussed below.(1) Determining compensation program design.Diversity of compensation opportunities and metrics is the most effective tool to cabin risk implied by a company’s compensation program. A balanced mix of short-and long-term elements ties compensation to the company’s performance, While reflecting the perspective that near-term actions are not only important in and of themselves, but also can have material long-term consequences. A combination of incentives to reward different aspects of the company’s performance also avoids a myopic focus on a single aspect of performance at the expense of other considerations that concern and impact business risk. With in this framework, long-term compensation elements ( e.g. , plans with multi-year targets or performance vesting conditions) generally shoul d have a horizon tied to the company’s business planning cycle to ensure that the committee and management are driven by a common perspective about the company’s prospects and challenges within the context of a board-vetted business plan. In considering plan design, the compensation committee should take into account other features of the compensation program that mitigate the risk of management misconduct or inappropriately risky behavior. These include claw backs and long-term stock ownership requirements. These features of compensation programs have become common in recent years. They should be re-examined periodically and in connection with material changes in business circumstances or compensation plan design. Are the claw back triggers calibrated to th e company’s circumstances and business-rather than being a photocopy of another company’s policy or someone else’s idea of best practice? Are they clear in their operation, while preserving the committee’s ability to exercise its business judgment in deter mining whether to seek compensation recoupment? Given the level of equity incentives granted or to be granted, should stock ownership guidelines be revised to include a “hold through retirement” provision?Moreover, the committee should consider whether the categories of employees covered by specific compensation programs are appropriate in light of overall pay elements and job responsibility and function. For example, if authority to make decisions that may have material risk consequences for the business extends to a relatively broad group of employees, it may be appropriate to incorporate diverse company-wide performance criteria with respect to a similarly broad group of employees, as compared to relatively narrow business unit performance criteria, in order to mitigate the incentive of employees to take inappropriate business unit risks.The committee also should consider the role of its discretionary judgment in determining the amount of performance-based compensation to be paid, as contrasted with strict adherence to objective performance-based formulas. Focus on therequirements of Section 162(m) of the Internal Revenue Code of 1986 generally has oriented committees towards a more formulaic approach to compensation decisions. While such an approach arguably should result in a closer correlation of pay to performance, persuasive arguments can be made that the exercise of committee discretion can be consistent with a pay-for-performance program while at the same time mitigating inappropriate business risks that might otherwise arise from certain performance based compensation programs. In many circumstances, there are approaches to Section 162(m) compliance that permit committees significant discretion to adjust payouts, upwards or downwards relative to objective formulas, to reflect subjective evaluations of performance.Committees also regularly exercise discretion to adjust final awards if the results of strictly formulaic metrics would be either too low or too high.Finally, in reviewing the risk- appropriateness of its compensation program, the committee should invite its compensation consultant and other advisors to provide perspectives about whether and how well the company’s compensation program operates to balance risk and reward and whether other design features are appropriate in light of the company’s particular circumstances and peer group practices.(2) Setting the performance matrix for incentive plans.The compensation committee may be charged with approving threshold, target, and maximum le vels of performance and payout “curves” under the company’s incentive plans, depending on their terms. Determining these plan design features is critical in translating strategic goals into incentives that are calibrated to promote the right kind, and the right amount, of risk-taking by executives. Given the significance and complexity of this responsibility, we discuss setting the performance matrix in more detail below.(3) Understanding compensation-related risk in the context of other mitigating controls and procedures.The compensation committee must refl ect on risk implied by the company’s compensation program through the lens of other risk-mitigating controls and procedures. While listed last, this may in fact be the best first step in the committee’s process, so that the overall “risk lens” is in place on an early and ongoing basis. Other mitigating controls and procedures can include the board’s own risk oversight mechanisms, whether in the form of “enterprise risk management” initiatives, an annua l strategic review or the work of the board’s other key standing committees,such as the audit committee or, if they exist, the risk, compliance, or finance committees. Also relevant are the operation and effectiveness of the company’s internal control over financial reporting, financial policies( e.g. , those addressing leverage, capital allocation, and use of derivatives), controls around areas of subjective judgment within the financial statements and dedicated management functions directed to risk.To the extent that this information is not available to the compensation committee either directly or through the work of the full board, it should consider other means to assure an appropriate ongoing understanding of these risk, such as through overlapping membership or other formal interaction among the board committees that bear responsibility for elements of risk oversight, or by those committees and the full board.译文管理层薪酬对公司绩效的研究资料来源：薪酬补偿 2010/2011 增补作者：摩登.海瑟美国证券交易委员会已修订其披露规则要求，关于一个公司的薪酬政策和做法，对所有员工进行讨论，如果他们创造的是“合理地可能”有对公司造成重大不利影响，可以同时考虑到方案特征和其他因素，减轻或抵消这种风险。

本科毕业论文（设计）外文翻译原文二：Board Composition, Executive Remuneration,And CorporatePerformance: The Case Of ReitsIntroductionStockholders in modern corporations are the residual risk bearers. As they don't have the expertise to run their firms, stockholders must rely on the firm'smanagement team. Jensen and Ruback (1983) defined the management team as the top managers as well as the board of directors of the firm. The separation between ownership and control in the modern corporation creates the incentives for managers to pursue their self-interest goals and not to maximize the shareholders’ wealth in what is termed in the literature as the agency conflict.Researchers have suggested many mechanismsby which managers are curbed from maximizingsolely their own utilities.These mechanisms (seeAgarwal and Knoeber 1996) can be either externalones, such as market for corporate control or internalones, such as the board of directors. The board ofdirectors is a basic element of corporate governance.The main functions of corporate boards are evaluating and approving strategies formulated by managers, providing an appropriate vehicle for stock holders desiring representation in company boards, and performing vigorous monitoring of managers’ actions to make sure that d ecisions by top managers come in line with shareholders’ interests. The literature is rich with studies that have shown the positive effect of the outside board members on firm value .The theory says that the way a board of directors is formed is intended to minimize the agency conflict costs. Also, some studies have shown how the size of the board affects corporate value (Yermack 1996; Zahra et al. 1989; Eisenberg et al. 1998). Consequently, the board of directors is an important governance mechanism that ensures that the interests ofshareholders and management are closely aligned, which would have its effects on corporate performance.In addition to the internal mechanisms that mitigate agency conflicts, managerial remuneration is an important device that can be used effectively to align the interests of stockholders and managers. The extent to which the remuneration package can achieve that alignment of interests is an empirical question. From a theoretical point of view, managerial remuneration should correlate weakly with corporate performance. The annual bonus usually is given in good as well as bad performance times. Good performance pushes the bonus up while bad performance does not depress the bonus. However, empirically, the relationship between management remuneration and corporate performance was detected and shown to exist. Generally, studies have found that there is a positive relation between managerial remuneration and corporate performance (Hamid 1995; Davis et al. 1994; Finnerty et al. 1993). Managerial remuneration and corporate performanceThe issue of managerial incentives has been heavily researched in financial economics. Managerial incentives, at least from a theoretical point of view, have an energetic effect on mitigating the moral hazard problem inherited in individual contracts. This would have a major impact upon firm's financial performance. Hamid (1995) examined the relationship between CEO compensation structure, ownership, and firm performance. He mainly focused upon the equity type of compensation not the cash compensation. His results confirmed a significant positive relationship between CEO equity compensation and firm Performance.Other types of compensation also have a positive effect on corporate performance even after considering some control variables. Davis and Shelor (1995) also documented a significant relationship between executive total compensation, firm size, and firm performance. Cannon and V ogt (1995) used Jensen’s measure to proxy for REITs financial performance and examined how severe the agency costs in REITs are. They find that advisor REITs with lowdirector ownership tend to underperform and pay higher advisor payments than do their counterparts with high ownership. They find no such relationship for self-administered REITs. These results show thatself-administered REITs make better use of marketbased performance compensation than do advisor REITs. Lewellen, Loderer, Martin, and Blum (1992) found that there is a significant relationship between managerial compensation and firm economic performance. Their results confirmed that compensation packages are designed to mitigate the agency conflict costs. In most previous studies, the relation between managerial remuneration and corporate performance was examined and shown to be positive when using total remuneration package, which includes usually (1) base cash remuneration, (2) incentive cash remuneration, (3) stock options, and (4) relative performance remuneration. This study, however, is concerned only with cash remuneration since it represents about 80% of total remuneration package.Board composition and financial performanceThe issue of board composition has deep roots in financial economics literature. Whether the way board of directors is formed can affect the economic value and performance of a firm has been investigated by a lot of researchers.The empirical evidence not solidly convincing regarding this issue when considering the entire literature, although many empirical studies support a positive relationship between boards dominated by outside directors and corporate performance. Cotter, Shivdasani, and Zenner (1997) documented evidence showing the positive effect of the outside directors on corporate performance as they found that shareholders’ gains fro m tender offers would be greater for targets with independent board members than for other targets. Rosenstein and Wyatt (1994) examined the wealth effects when an officer of one public corporation joins the board of directors of another corporation. They find that the nonfinancial sending firms experience negative returns while the receiving firms do not gain from these appointments. This suggests that when executives join boards of other corporations, they become distracted from shareholders wealth maximization objective. The financial sending firms experience positive returns when sending their officers to other firms. Barnhart et al. (1994) investigated the effect of board composition on company performance. When they do not control for variables that have effects on company performance, the relationship between corporate performance, proxied by market-to-book ratio of equity, and board composition issignificant. When they account for managerial ownership and variation across industries, board composition is found to be related to market-to-book ratio in a nonlinear fashion. Lee, Rosenstein, Rangan, and Davidson (1992) revealed the effectiveness of the board of directors in enhancing firm performance by showing that stock prices of firms whose boards are dominated by independent directors are associated with larger abnormal returns than those of companies whose boards are dominated by less independent directors. Byrd and Hickman (1992) reviewed the literature and supported the conjecture of the positive relationship between corporate profitability and boards dominated by outside independent directors. Gilson (1990) also confirmed the idea that board composition is related to financial performance of firms as he documented an evidense that after company default, board composition is altered significantly by creditors who tend to appoint their representatives to the board. Byrd and Hickman (1990) showed that the stocks of firms whose at least 50% of their board members are independent are associated with higher returns for stockholders in case of acquisitions. They noted, however, that these results are sensitive to the method used to classify directors. Rosenstein and Wyatt (1990) also showed that the addition of an outside director increased corporate value. In a theoretical paper, Zahra and Pearce (1989) developed a theoretical integrative model which specifies important relationships between board variables and company performance. They noted that these relationships depend on several internal (industry factors, legal aspects, etc.) and external (ownership structure, company life cycle, complexity of operation, etc.) contingencies identified in their model. All these attributes play an important role in determining directors’ success in executing their contro l and monitoring roles, which is a prerequisite for a glamourous company performance.Molz’s (1988) findings do not support the association between firm performance and the managerial dominated boards.Weisbach (1988) shows that companies with outside-dominated boards are more likely to replace a CEO based on performance than companies with insider-dominated boards. The bulk of the previous literature shows a positive relationship between outside directors and corporate performance. The premise that is brought up by this study is that effective monitoring does notcome from all outside directors as hypothesized by some previous studies in the literature, but it comes only from that group of directors that is able to ask the hard questions. Previous literature in corporate governance classifies outside directors into two categories: gray outsiders and pure (independent) outsiders. The gray outsiders have some type of affiliation with the company on whose board they sit, which could limit their capability to exercise effective monitoring on management. These affiliations include legal, banking, consultancy, and other relationships. Pure outside directors, on the other hand, have no relationship with the company other than their directorship and, hence, bear no costs from challenging managers. Byrd and Hichman (1990) showed that the method of classifying board of directors causes the relationship between board composition and corporate performance to change. Board size and corporate performanceTheoretically, it is expected that coordination and communication will be more effective and decisionmaking problems will be less in relatively small boards, which might positively affect board performance. On the other hand, large boards have the tendency to include directors with diverse expertise and skills. These two contradicted premises deserve more inspection in the REITs industry due to their different control system. On top of that, there is a scarcity in the literature regarding studies of the relation between board size and corporate performance. This study conjectures that, in general, the ideal board size varies with firm size. Eisenberg, Sundgren, and Wells (1998) used accounting figures to measure firm performance. They found evidence that small boards had positive effects on corporate performance. Yermack (1996) adopted the point of view of a negative association between board size and performance. He founds an inverse relationship between the two variables. This suggests that the small size of a board of directors helps to improve the efficiency of the decision making process and, hence, promotes shareholders, interests. Brown and Maloney (1992) also found that smaller boards of directors are associated with better firm performance. Given that the previous studies have cross-sectionally examined many industries, the documented relationship might be altered when studying one industry with unique features regarding the control system.Performance measureThe literature is filled with different types of financial performance measures. All these measures can be categorized as either accounting-based measures or market-oriented measures. Usually, accounting measures that are constructed from financial statements data are highly criticized in the finance community. Also, these measures usually do not account for differences in systematic risk; hence, they diverge from the economic market value of firms (see Benston 1985). That is why financial analysts sometimes reclassify some balance sheet items in order to judge the precise liquidity of a firm.On the other hand, the market-based performance measures are determined solely and collectively by the market participants who interpret managers’ signals correctly, assuming efficient financial markets, and usually firm managers have no discretion over these measures. Based upon that, and because the sample firms are publicly owned companies and hence their securities are priced in financial markets, this study will use a market-based financial performance measure to measure REI Ts’ financial performance. Tobin’s Q, as a market-based performance measure, represents a sharp measure of corporate value. Since it incorporates the value of all assets, it is supposed to reflect both the quality of monitoring practiced by pure directors and the degree to which shareholders’ interests and those of managers are aligned, assuming that REITs’ securities are priced in efficient capital markets. Tobin’s Q can be defined as the ratio of the firm value to its assets replacement costs. The literature is filled with different versions of Tobin’s Q. Since no consensus is reached as to the best Tobin’s Q ratio, three different ratios of Tobin’s Q will be used in this study. This procedure serves two purposes. The first is to test the sensitivity of the results to different definitions of corporate performance proxied by Tobin’s Q. Second, the effect of employing different versions of Tobin’s Q on the results of many different studies in the literature is partly resolved. The three versions of Tobin’s Q employed in this study are as follows:Q1=(MVE+TA-EQ1)/TAwhere MVE is the product of stock price (year close) by the common stocksoutstanding .TA is total asset, and EQ is the book value of equity.Q2=(MVE/ book value of Net Assets)^2Q3=((MVE+LTD+STE+ PSALV)/TA)^3Where LTD is the book value of long term debt.STD is the book value of the short-term debt, and PSALV is the preferred stock at liquidation value. For the sake of illustration, the correlation among the three versions of Tobin’s Q was calculat ed and was shown to be very high. Therefore, it is expected to have similar results as far as our analysis is concerned.ConclusionThis study has investigated the effect of the composition of the board of directors (a monitoring mechanism) and managerial remuneration (bonding mechanism) on the corporate performance of REITs. The results indicate that there is a negative relationship between cash managerial remuneration and firm performance. Also, unlike some previous studies, this paper shows that only pure directors are able to practice effective monitoring and gray directors have no significant effect on firm performance. The outside directors, both gray and pure, have no impact upon finance performance in the REITs industry. Moreover, this paper tackled the board size effect investigated previously in the literature. The findings of this study confirm a nonlinear relationship between board size and firm performance. The relationship is negative when board size is small, and it turns positive when board size grows.Source:Turki Alshimmiri,2004.“Board Composition, Executive Remuneration, And Corporate Performance: The Case Of Reits”.Corporate Ownership & Control August.pp.104-112.译文：董事会结构，高管薪酬和公司绩效：以房地产投资信托基金为例简介股东是现代公司的的剩余风险承担者。

文献出处：Mehran H. The study on the correlation of Senior Executive Compensation and corporate performance in listed companies [J]. Journal of financial economics, 2016, 2(3): 161-174.原文The study on the correlation of Senior Executive Compensation and corporateperformance in listed companiesMehran HAbstractDue to information asymmetry between owners and executives, led to the moral risk and adverse selection problems. How to make the executive is satisfying the interests of the white body at the same time maximize the enterprise value ultimately achieve a win-win situation, become a great concern of many scholars.This paper from two aspects of theory and the literature reviewed the executive compensation and corporate performance of the related content. Then the relationship between executive compensation and corporate performance empirical research. This article mainly from two aspects to analyze the correlation between executive compensation and corporate performance, is a longitudinal descriptive statistical analysis, samples are divided into general descriptive statistical analysis and descriptive statistical analysis, the second is to collect data, respectively, the university and multivariate linear regression analysis, selection of the top three executive pay means the natural logarithm of executive compensation, return on equity and earnings per share measure of enterprise performance, and to join the company size, financial leverage, ownership concentration, executives shareholding, the proportion of state-owned shares, the proportion of independent directors, the chairman and general manager of situation eight control variables, the size of the board of supervisors.Keywords: the listed company, executive compensation and corporate performanceIntroductionModern enterprise mostly adopts share-holding system operation, the emergence of the joint-stock company, led to the separate ownership with the agency. Shareholders as the owner of the enterprise property eventually, but not to participate in enterprise management and decision-making, but the entrusted agent for the management and operation enterprises, formed "by a proxy" relationship. Agent instead of shareholders as the authorized agent of the enterprise, its status or senior management of the enterprise. Considering the agent's risk factor, such as level of morality, ability, together with information asymmetry between shareholders and executives, can produce the agency cost.Executives as the human capital of enterprise is the most important and scarce, because its mastery of the enterprise management decision-making, the height of the enterprise control rights virtually increased the likelihood they use right to violate the interests of the shareholders. In order to solve this contradiction, shareholders adopted both constraints and incentive mechanism to balance the principal-agent relationship, can excite the work enthusiasms of executives unceasingly, can maximum limit to maximize shareholder wealth. Whether to stand in the Angle of the shareholders or executives, the company's performance is the important measure of executive pay. So, study on executive compensation and corporate performance correlation for an enterprise to formulate salary incentive mechanism and solve the problem of agency costs, it is very necessary.Literature reviewThe correlation of executive compensation and corporate performance Murphy (1985) 1964-1981 using the company data, chose the 73 largest manufacturing enterprises of the data of 500 managers as the research sample, using empirical method to test the stock yield, the relationship between executive compensation and corporate earnings growth, the conclusion is: the elasticity value cash incentives for the value of the company is near to 0.11, measured with returns to shareholders of company performance pay was significantly positively related to relationship with the manager. The conclusion and Coughlan and Schmidt (1985) of the two scholars research conclusion.Carpenter and Sanders (2002) through the study concluded that: the senior management team and for board members incentives related relationship, motivation of the senior management team can more effectively improve the business performance.Phillip and Cyril (2004) by using linear regression and curve correlation analysis method of combining the, general manager of relationship between pay and performance indicators for empirical research, the conclusion is: the general manager, general manager of wages, and payment of remuneration bonuses both are positively correlated with corporate performance.Kevin (2011) by 2006-2009, 280 companies listed on the nose study draws the following conclusions: executive compensation and corporate performance (measured by return on equity as index) was significantly positive correlation; Affect the executive compensation level of the most significant variable is the size of the company.The influential factors of executive payCores, j., Holthausen, R.W. and Larkers, D.F (2005) in corporate governance structure as the breakthrough point to study the relationship between general manager compensation and corporate performance, the results show that if the company governance structure is imperfect, the condition of the compensation is the general manager will appear on the high side; General manager compensation and negatively related stake, was positively correlated with the size of the board.Kin Wai Lee (2005), Pieter Duffhues etc. (2008) after analyzing the influence factors of the company's executive compensation get the following conclusion: the board of directors of the company locates the geographical position, industry, and the size is about pay will have an impact factor; Whether they are of good corporate governance structure will largely affect the corporate performance.Kim and Hwang (2009) argue that directors only without actual contact with the enterprise are in the true sense of independence. The two scholars to fortune 100 companies in 2005 data from 1996-2005 as a sample for empirical research, get the following conclusion: director independence negatively related with executive pay,with pay performance sensitivity and in accordance with the performance was a positive correlation decision term chance.Research hypothesisExecutive compensation and corporate performance"The ownership and operation separate" on the one hand, make the enterprise economic efficiency was improved, but on the other hand also brought "by a proxy" problem. The principal and agent are in the pursuit of self-interest maximization, but due to the differences between the interests of both the demand, but on the market and the existence of information asymmetry phenomenon, in this case, the agent can make the behavior of the damage the interests of the principal for your own benefit, "moral hazard" and "adverse selection" problem such as will as, thus appeared the agency cost. In order to balance the principal-agent relationship, in turn, reduce agency cost; the owner will need to sign a compensation contract and operators. Compensation contracts, executive compensation and corporate performance, executive compensation determined by business performance, to link executive compensation and corporate performance effectively. In this case, the executive in order to improve their own reward will try my best to company management and company performance can be improved.Hypothesis 1: executive compensation and corporate performance are related Executive pay and company sizeThe size of the company has a large influence on executive pay. Compared with the smaller companies, the company size, the greater the division of the thinner, the more people, the more the more complex organization structure, operation and management problems, which makes operators face a greater risk of management and pressure, the ability and quality of senior executives put forward higher requirements. In this case, in order to good operation and management company, senior executives must pay more time and energy, and few businesses to be able to do this kind of ability, therefore, senior executives for more pay and logical.Hypothesis 2: executive pay scale is related with the companyExecutive compensation and the asset-liability ratioCompensation incentive of listed company's purpose is to reduce agency costs, ownership and operation separate, and keep the reasonable capital structure can reduce agency costs, thereby increasing the interests of the shareholders.Jesen and Michael (1986) put forward the free cash flow, said he thought the enterprises need to pay interest and principal on debt financing, so that the company's free cash flow is reduced, executives waste of corporate resources and reduce the chance of a successful, at the same time, through the debt contract, creditors have the supervision of executive behavior motivation, this agency problem between executives and shareholders and ease. When the company debt levels continue to improve, the creditor supervision executive behavior motive is also a corresponding increase. On the margin, as creditors supervision of external supervision and internal salary incentive mechanism can be substituted, therefore, when the enterprise debt level enhances unceasingly, the external supervision be enhanced, so that you can properly reduce the level of salary incentive, thus make executive pay in a certain extent, be suppressed.Hypothesis 3: executive compensation is negatively related to the asset-liability ratioExecutive pay and ownership concentrationIn general, if the company's ownership concentration is high, the big shareholder control of the executive ability of the stronger the will, they will be susceptible to the stimulation of interests for executives to implement effective supervision, prevent using executive position to improve their pay too much to damage the interests of the shareholders. On the contrary, when the company's equity dispersion, due to the constraints of the supervisory cost and especially when the benefits of less supervision cost, small and medium-sized shareholders motivation will gradually disappear, the supervision of such executives will have larger power, thus they would use the position to raise their pay.Demsetz and Leh (1985), Shleifer and Vishny (1986) through the study found that in the practical work, because shareholders to supervise the management of the cost is high, in fact only the big shareholders have the ability to effectively supervise. When the company the more dispersed ownership, especiallywhen the benefits of less supervision cost, small shareholder supervision and motivation will be weakens even disappears completely, it will make managers to easily get more power, so that they can in advantage position in negotiations with shareholders to pay for their higher pay.Hypothesis 4: executive compensation is negatively related to the ownership concentrationExecutive compensation and executive shareholding"The ownership and operation separate" bring the problem of "entrust - agent”. The principal and the agent is "rational economic man", they are all in the pursuit of self-interest maximization, but due to the differences between the interests of both the demand and the market exists the phenomenon of information asymmetry, agents may make the behavior of the damage the interests of the principal for your own benefit, thus formed the agency cost. One of the effective ways to solve the principal-agent problem is equity incentive to executives, let executives holding shares of the company. Executive stock holding company, the more the interests of executives and the company's interests more closely, so both have common interests, enterprise value maximization. Executives in order to realize their own interests will inevitably to do all the management of the company, improve the efficiency of the enterprise, so that executives can get higher pay.Hypothesis 5: executive compensation and executive shareholding is related Research prospectFirst, in terms of executive pay, in addition to consider the disclosure of financial report of listed companies of monetary income, can also consider the effect of non-monetary income and hidden income. Secondly, in terms of business performance, due to the stock market is not mature, share price volatility, stock prices it is difficult to accurately reflect the operating performance of enterprises, this article only selected the return on equity, earnings per share both accounting profit index to measure business performance. With the continuous development of the securities market and perfect, in a follow-up study can use market value indicators (such as Thbins. Q value, economic value added, etc.) To measure business performance. Finally, the influenceof the relationship between executive compensation and corporate performance factors can also, from the perspective of the other external factors and internal factors on executive compensation and corporate performance relationship of further research.译文上市公司高管薪酬与企业绩效的相关性研究Mehran H摘要由于所有者与公司高管之间存在信息不对称,导致了风险道德、逆向选择等问题。

高管薪酬和激励外文翻译（可编辑）高管薪酬和激励外文翻译外文题目 Executive Compensation AndIncentives 外文出处 Acodemy of Management Perspectives,20062:p25-40 外文作者 Martin J. Conyon原文:Executive Compensation And IncentivesMartin J. ConyonExecutive compensation is a complex and controversial subject. For many years, academics, policymakers, and the media have drawn attention to the high levels of pay awarded to U.S. chief executive officers CEOs, questioning whether they are consistent with shareholder interests. Some academics have further argued that flaws in CEO pay arrangements and deviations from shareholders’ interests are widespread and considerable. For example, Lucian Bebchuk and Jesse Fried provide a lucid account of the managerial power view and accompanying evidence. Marianne Bertrand and Sendhil Mullainathan too provide an analysis of the ‘skimmingview’ of CEO pay. In contrast, John Core et al. present an economic contracting approach to executive pay and incentives, assessing whether CEOs receive inefficient pay without performance. In this paper, we show what has happened to CEO pay in the United States. We do not claim to distinguishbetween the contracting and managerial power views of executive pay. Instead, we document the pattern of executive pay and incentives in the United States, investigating whether this pattern is consistent with economic theory.The Context: Who Sets Executive Pay Before examining the empirical evidence presented in this paper, it is important to consider the pay-setting process and who sets executive pay. The standard economic theory of executive compensation is the principal-agent model. The theory maintains that firms seek to design the most efficient compensation packages possible in order to attract, retain, and motivate CEOs, executives, and managers. In the agency model, shareholders set pay. In practice, however, the compensation committee of the board determines pay on behalf of shareholders. A principal shareholder designs a contract and makes an offer to an agent CEO/ manager. Executive compensation ameliorates a moral hazard problem i.e., manager opportunism arising from low firm ownership. By using stock options, restricted stock, and long-term contracts, shareholders motivate the CEO to imize firm value. In other words, shareholders try to design optimal compensation packages to provide CEOs with incentives to align their mutual interests. This is the contract approach to executive pay. Following Core, Guay, and Larcker, an efficient or optimal contract is one “that imizes the net expectedeconomic value to shareholders after transaction costs such ascontracting costs and payments to employees. An equivalent way of saying this is that contracts minimize agency costs.”Several important ideas flow from this definition. First, the contract reduces manager opportunism and motivates CEO effort by providing incentives through risky compensation such as stock options. Second, the optimal contract does not imply a “perfect” contract, only that the firm designs the best contract it can in order to avoid opportunism and malfeasance by the manager, given the contracting constraints it faces. Third, in this arrangement, the firm does not necessarily eliminate agency costs, but instead evaluates the marginal benefits of implementing the contract relative to the marginal costs of doing so. Improvements in regulation or corporate governance can possibly alter these costs and benefits, making different contracts desirable. Moreover, what is efficient at one point in time may not be at another. Improvements in board governance, for example by adding independent directors, may lead to different patterns of compensation, stock, and option contracts that are desirable for one firm but not another.An alternative theory is that CEOs set pay. This is the managerial power view, exemplified recently by Bebchuk and Fried. In this theory, the board and compensation committee cooperate with the CEO and agree on excessive compensation, settling on contracts that are not in shareholders’ interests. This exces s pay constitutes an economic rent,an amount greater than necessary to get the CEO to work in the firm. The constraints the CEOs face are reputation loss and embarrassment if caught extracting rents, what Bebchuk and Fried call “outrage costs.” Outrage matters because it can impose on CEOs both market penalties such as devaluation of a manager’s reputation and social costs?the social costs come on top of the standard market costs. They argue that market constraints and the social costs coming from excessively favorable pay arrangements are not sufficient in preventing considerable deviations from optimal contracting.Executive CompensationThere is substantial disclosure about U.S. executive compensation. The Securities and Exchange Commission SEC expanded and enhanced disclosure rules for U.S. executives in 1992. As a result, the proxy statements of firms contain considerable detail on stock ownership,stock options, and all components of compensation for the top five corporate executives. There are four basic components to executive pay, each having been the subject of much research. First, executives receive a base salary, which is generally benchmarked against peer firms. Second, they enjoy an annual bonus plan, usually based on accounting performance measures. Third, executives receive stock options, which represent a right, but not the obligation, to purchase shares in the future at some pre-specified exercise price. Lastly, pay includes additional compensation such asrestricted stock, long-term incentive plans, and retirement plans.Executive IncentivesWe now turn to executive incentives and the link between pay andfirm performance. The evidence demonstrates that executive compensation and the fraction of pay accounted for by option grants increased during the 1990s. Principal-agent theory predicts that a firm designs contracts in order to yield optimal incentives, therefore motivating the CEO to imize shareholder value. In designing the contract, the firm recognizes the CEO is risk averse. Thus, imposing greater incentives requires more pay to compensate the agent for increased risk. In the previous section, the paper demonstrated that CEO pay has increased. Next, we examine what has happened to CEO incentives. The analysis shows that executives have considerable equity incentives that create a strong and increasing link between CEO wealth and firm performance. This finding seems at odds with the notion that executive pay and performance are decoupled. It is, however, consistent with other economic evidence, showing that the link between pay and performance has been increasing in the United States.Executives receive incentives from several sources. They receive financial incentives from salary and bonus, as well as new grants of options and restricted stock, which together measure flow compensation. They also receive incentives from changes in their aggregate holdings of stock and options in the firm, as described in detail below. Finally, theprobability of termination because of poor performance gives the CEO an incentive to pursue strategies that imize firm value. In this case,if terminated, an executive suffers reputation loss and human capital devaluation in the managerial labor market. However, this paper?consistent with other recent research in financialeconomics?focuses on compensation and equity incentives, leavingaside career concerns and the labor market for managerial talent. In other words, it restricts attention to financial incentives.The key to understanding financial incentives is recognizing thatthey arise from the entire portfolio of equity holdings and not simply from current pay. Equity incentives, then, are the incentives toincrease the stock price arising from the managers’ ownership of financial securities in the firm. For example, a CEO may receive 100,000 options this year, which might add to 400,000 options granted inprevious years, for a total of 500,000 options held. If the stock price decreases, then the value of the 100,000 options granted this year declines? but so does the value of the options accumulated from previous years. Since the CEO will care about the whole stock of 500,000 options, not simply this year’s 100,000, executive compensation received in any given year provides only a partial picture of CEO wealth and incentives. To understand CEO incentives fully, it is important to focus on the aggregate amount of shares, restricted stock, and stock options that the CEO owns in the firm.The evidence shows that CEOs have plenty of financial incentives, arising primarily from CEO ownership of stock and options in their firms. Again, we would stress that such financial incentives are only onefactor motivating executives. Agents are as likely to be motivated by intrinsic factors of the job, career concerns, social norms, tournaments, and the like. One problem with stock options and other forms ofincentive pay is not that they provide too few incentives, but that they may lead to unintended consequences. It is well known that incentivescan bring about behavior by the agent that was unanticipated by the principal. In a classic paper, Steven Kerr highlighted the folly of rewarding A while hoping for B. In short, he articulated the notion that one gets what one pays for. If one rewards activity A and not B, then people will exert effort on A, while de-emphasizing B. Kerr illustrates his point with an array of examples from politics, industry, and human resource management. In general, this is a problem of providing appropriate incentives to agents engaging in multiple tasks. More recently, Robert Gibbons has discussed the design of incentive programs recognizing such problems.Another problem with incentive compensation is that it may encourage opportunistic behavior by managers, manipulation of performance measures, or cheating. The powerful and often unanticipated effects of financial incentives on economic outcomes have been documented in diverse contexts such as classroom teaching, real estate markets,vehicle inspection markets, and the behavior of physicians. In the corporate context, David Yermack demonstrates that CEOsopportunistically time the award of option grants around earnings announcements in order to increase their compensation. Other studiesfind that private information is used by executives to engineer abnormally large option exercises and hence the payouts from those options. In addition, studies show that firms with more incentives are associated with greater earnings manipulation. Recent studies show that the likelihood of a firm being the target of fraud allegations is positively correlated with option incentives. In short, options and incentive pay may motivate managerial behavior that is not always anticipated or ideal. When designing compensation plans, boards must be aware of the unwanted as well as beneficial effects of incentives.ConclusionsExecutive compensation is a controversial and complex subject that continues to attract the attention of the media, policymakers, and academics. Contract theory predicts that shareholders use pay to provide incentives for the CEO to focus on imizing long-term firm value. Since CEOs have relatively low ownership of firm shares, they might otherwise behave opportunistically. An alternative theoretical perspective, the managerial power view, is that CEOs control the pay-setting process and set their own pay. This theory predicts that compliant compensation committees and boards provide CEOs with excess pay or compensation “rents” and that contracts are suboptimal from the shareholders’ perspective. Distinguishing between these two theories is an important challenge for future research.This paper provides evidence on what has happened to CEO pay between 1993 and 2003. It shows that total compensation increased significantlyover this period. Grants of stock options to CEOs and executives are the main driver of CEO pay gains. The paper also documents that CEOs have important financial incentives. These arise from the portfolio of firm stock and options owned by the CEO. The important point is that, if the stock price declines significantly, the value of the CEOs’ assets falls. Analogously, if asset prices increase, so does CEO wealth. In consequence, the wealth of the CEO varies with the stock price performance of the firm. An important research challenge is to fully understand the potentially unintended consequences of providing greater incentives to agents.In practice, CEO compensation contracts are determined by compensation committees that may have conflicting incentives to align with the CEO leading to suboptimal contracts and excess pay or with shareholders leading to optimal contractsand appropriate pay. The analysis in this paper illustrates that U.S. boards and compensation committees are becoming more independent measured by fewer insider directors and a greater number of outside directors. The evidence showsthat the presence of affiliated directors on the compensation committee an instance where greater managerial power is expected doesnot lead to greater CEO pay or fewer CEO incentives.In summary, high pay itself is not evidence of inefficient contracts but may simply reflect the market for CEOs and the pay necessary to attract, retain, and motivate talented individuals. Boards of directorsneed to design compensation contracts to align the interests of owners with managers. One test of whether the corporate governance system is working appropriately, including executive compensation arrangements, is to evaluate economic performance. Holmstrom and Kaplan investigate the state of U.S. corporate governance in the wake of corporate scandals. They conclude that the U.S. economy has performed well, both on an absolute basis and relative to other countries over about two decades. Importantly, the economy has been robust even after the scandals were revealed. This is not to deny that improvements in governance arrangements may be beneficial. Furnishing CEOs with appropriate compensation and incentives is desirable for a healthy economy. However, ensuring that the contracting process is not corrupted is an important goal for corporate governance extracts译文:高管薪酬和激励Martin J. Conyon高管薪酬是一种既复杂又有争议的话题。

文献出处:Part of the Advances in Intelligent Systems and Computing book series (AISC, volume 362)原文：An Empirical Study of Relationship Between Executive Compensation and Performances of Chinese Listed Company—Based on Simultaneous Equations ModelAbstract：As a potentially important internal incentive, the executive compensation has gradually become a research focus. Based on simultaneous equations model and principal component analysis, this paper studies the relationship between executive compensation and corporate performance. Using comprehensive financial and accounting data on China’s manufacturing listed companies from 2009 to 2012, we find that the improved corporate performance can advance executive compensation. At the same time, we also find executive compensation has positive feedback effect to company performance. The paper also sees that the company’s equity incentive has the potency to improve the effectiveness of the performance. This result offers insights to shareholders focused on enhancing the design of internal corporate governance mechanism.Keywords：Simultaneous equations model Principal component analysis Executive compensation Corporate performance1 Introduction：According to the modern agency theory, with the separation of ownership and executive, the objective conflict between corporate executive and shareholders intensifies. To reduce such conflict, shareholders through the remuneration incentive mechanism allow the executive to have some residual claim, so that makes their goals consistent. Meanwhile, in the condition of trust-agent theory, due to the information asymmetry, the managers have the motivation to pursuing their own interests. Toreduce agency cost and maximize wealth, the shareholders tend to through the company performance to determine the executives pay, trying to motivate managers to act in the best interest of shareholders.However, a survey shows that under the influence of the 2008 international financial crisis, the overall profits of China’s quoted companies generally decline, while the payment of the executives continues to rise. It had aroused strong opposition among the investors. By comparing the 431 quoted companies in 2007 and 2008, the data shows that the profits of quoted companies decrease by 26.2 billion Yuan in total, while the executives pay increase by 200 million Yuan [1] . This is aroused the public question the relationship between the executive compensation and company performance. What is the interaction between the two things? The paper will discuss this question by establishing simultaneous equations and get some new discoveries.We will test the interaction between the executives compensation and company performance by establishing simultaneous equations. To avoid the limitation of single variables, we will get the overall performance index through the analysis of the principal components of the four variables. However, there are still some limitations in the paper, mainly reflected in the following aspects: (1) The analysis of the incentive theory for executive compensation is not thorough. Besides the low level of domestic executives pay and the different pay in each period also caused diverse results. (2) The data is limited to the industrial quoted companies from 2009 to 2012, and the influence of industries and some non-financial factors are not considered. (3) Because the performance indicators are too much to listed, the paper only use four indicators to reflect the company performance, so it may not completely represent the true performance of the company.2 Literature Review2.1 The Incentive Effects of Executive CompensationAs for the study of executive incentive and compensation, the overseas scholars involve in the field earlier. With the change of the external environment, the conclusion also changes. Taussings and Baker [2] are the earliest scholars to study enterprise salary, finding little correlation of executive compensation withperformances. By analyzing external determinants of enterprise CEO compensation, Finkelstein and Hambrick [3] found that different remuneration packages have different effects on CEO’s behavior, and ultimately affect the company’s overall performance. Jensen and Murphy [4] found that if the CEO compensation increase or decrease by every $3.25, then the shareholder’s wealth will increase or decrease by every $1000. Accordingly, compensation and shareholder’s wealth are positively correlated. Mehran [5] found that executive compensation incentive became a driving force for improving corporate performances. With the development of theories and methods, studies from abroad tend to believe that executive compensation has a significant effect on corporate performance. By analyzing the relationship between compensation quantity and corporate performance in three incentive schemes, Li et al.[6] found that the increasing in executive compensation can significantly improve the corporate performance. Generally speaking, with time goes on, an increasing number of scholars believe that the incentive for executive compensation works indeed.2.2 The Impact of Corporate Performance on Executive CompensationTheoretically, attaching executive compensation to corporate performance can reduce the probability of Agency’s conflict, and positive relationship exists. Many scholars attempted to use various analytical methods to test this theory, but conclusion varied. By using Black-Scholes model to analyze the relationship between the CEO’s compensation and the share value in stock market of 478 large U.S companies, Hall [7] found that the value of the company increased by every 10 %, management salaries and bonuses would increase by 2.4 %. Lai [8] who concentrated on the impact of incentive mechanism and governance structure on company’s compensation, found that the executive compensation was positively related to accounting performance significantly but irrelevant to market performance, thus he believed that quoted companies inclined to regard accounting performance as incentive assessment indicator. Mao and Zhang [9] tested the relation between Executive compensation and corporate performance in domestic quoted companies through ownership structure indicators, finding that the positive relationship between executive compensation and corporate performance existed, and the executives increased their salaries through theimprovement of corporate performance. In turn, the increase in salaries impels them to work harder to improve corporate performance.3 Theoretical Analysis and HypothesesThe aim of incentive mechanism is to make executives act in the best interest of shareholders and to improve efficiency, which is also the cornerstone of incentive mechanism. In order to improve their income and appreciate the compensation given by principal, managers work harder. Meanwhile,they consider more for the shareholders when they behave, which will undisputedly reduce the agency cost and improve corporate performance. According to the above, we can propose hypothesis.Hypothesis 1. (H1) Executive compensation incentive indeed has a positive effect on corporate performance in the domestic quoted companies, that is, with the increase in salary, the corporate performance gradually increases.According to principal-agent theory, the separation of ownership and management forces companies to hire more external managers. Due to there is a serious information asymmetry between the principal (shareholders) and their proxies (managers), and that managers have a practical “control” and lack the necessary binding mechanism. Then, these make the managers tend to have the on-the-job consumption motives or do not work hard to shirk their responsibilities. In order to reduce the agent cost of information asymmetry and the risk of moral hazard, stockholders will sign the contract for pay-performance with the managers before their entry. Under the contract, corporate performance is directly related to the interests of executive by linking executive compensation and corporate performance. Thus, in order to maximize their individual interests, the managers must work hard to improve the performance of the company. It can be concluded from the above theory that it exist significant positive relationship between executive compensation and corporate performance. Therefore, we propose the following hypothesis.Hypothesis 2. (H2) Executive compensation is affected by the performance of the company, that is, the executive compensation increase with the increase of the performance of the company.However, in reality, the relationship between management compensation andperformance of quoted companies in China seems generally weak. According to the survey, because of the effection of the global financial crisis in 2008, profits of quoted companies in China generally declined, but executives’ payment did not fall but rise. Comparing the data in the year of 2007 and 2008 of 431 quoted companies, we found that total profits of quoted companies had fallen by 26.2 billion Yuan, while the executive pay had increased by 200 million Yuan [1]. Based on this, we propose the alternative hypothesis.Hypothesis 3. (H3) Executive compensation and corporate performance are not related.4 Study Design4.1 Sample Selection and Data SourcesAll samples are derived from CSMAR database system and the data analysis is completed by SPSS17.0 and EXCEL. According to the research, we collected annual data of Manufacturing quoted Companies in Shen & Hu A-share Stock Market between 2009 and 2012 as sample. In order to ensure the effectiveness of research sample, we sifted:(1)Rejected a Stock quoted companies which issue B stock or H stock simultaneously;(2)Rejected ST orST quoted companies which have poor performance;(3)Rejected the quoted companies which don’t disclose detailed data or have incomplete data;(4)Rejected the quoted companies which executive couldn’t be paid;(5)Rejected the quoted companies which Tobin’s Q value is more than 2.Based on the above principles, we get the effective samples: 1144 samples of 2012, 895 samples of 2011, 430 samples of 2010, and 487 samples of 2009.4.2 Selection of Variable1. Compensation indexThis paper selects the cash compensation that the executive got to measure their incentive compensation index, and choose the average figure of the top three compensation of executive as the executive compensation index. In order to eliminate the influence of scale, we choose Natural Logarithm, denoted by AP.2. Corporate performance indexAgency theory put emphasis on using multiple indicators to exclude the deviation from Single indicator, to reduce the agency’s opportunity cost and to eliminate conflicts. In order to work better, this paper select ROANPMROTA and Tobin’s Q (market performance indicator). Meanwhile, after the analysis of factors, we select the common factor to reflect corporate performance and use it to comprehensively evaluate and analysis samples’ performance.3. Control variablesIn order to reflect the relation between executive compensation and corporate performance better, and avoid the phenomenon of spurious regression, the paper adds corporate size, GRO, LEV and MSR in Empirical model.5 Empirical Results5.1 Descriptive StatisticsTable 7 provides the variables’ descriptive statistics of sample companies. It shows that the sample companies’ performance (F) is 0.504, median is 0.506 and indicates that the sample’s overall profitability is good. Executive compensation (AP) minimum is 9.338, maximum is 15.865, standard deviation is 0.924, indicating that there is a big difference between the executive compensation. The maximum ofexecutive shareholding ratio (MSR) is 97.3 %, the minimum value is 0, the median is 1 %, average is 16.7 %. It shows that the executives which hold no stock or lower stock ownership in sample company exists wildly, and it has a limited equity incentive. At the same time, sample company’s executives also have large differences in shareholding.Other control variables-company size (SIZE), growth (GRO) and financial leverage (LEV)- differ largely, indicating that the company size, growth and the degree of financial risk are different, and it helps to control the impact on each variables of the sample companies.5.2 Regression AnalysisAccording to the regression results of simultaneous equations in Table 8, we know that the correlation coefficient between executive compensation (AP) and firm performance (F) is 0.012 and there are 10 % passed the test about level of significance. It shows that the executive compensation of sample companies produce incentives to improve the company performance. Thus, the hypothesis 1 is verified. Meanwhile, we also find that the relationship is not particularly significant. It proves that the company performance is not the only factor to determine the executive compensation. With the increase in executives’ power; compensation may not meet the growing “appetite”. The correlation coefficient between the performance of the company (F) and executive compensation (AP) is 0.356, significantly correlated at the 1 % level, and salary increases with the improvement of the performance of the company. This conclusion confirms the hypothesis 2. The empirical results show that thepay-performance under the contract, executive compensation is indeed linked to the corporate performance in sample companies’. In order to maximize their own interests, executives must strive to improve business performance and to achieve the final goal through this way.In addition, in the incentive compensation equation, we can find that there is a significant positive correlation between executive shareholding ratio (MSR) and company performance (F). This suggests that when the company executive enjoys the right of residual claim, they will tend to be consistent with the interests ofshareholders. The more the executive hold shares, the larger the correlation is. They will regard enterprise as a community of interests, and strive to improve the company’s operating performance. And in the compensation criterion equation, executive shareholding ratio (MSR) and executive compensation (AP) were positively related, but not significantly, probably in Chinese enterprises, executive stock ownership is not widespread. In addition, when executives hold stocks, it might exclude executive who owned equity in order to avoid suspicion at the pay-setting.Meanwhile, when the variance inflation factor is greater than 10, we usually think that a serious multicollinearity exists between variables. However, the simultaneous equation model of multiple linear diagnosis result shows that the maximum value of the equation inflation factor (VIF) is 1.43, which is far less than 10, so there is no multicollinearity between the model variables.6 ConclusionsAccording to a empirical study about relationship between Executive Compensation and Performances, the present paper can draw third important contributions: First, in China, the “pay-performance incentive” mechanism has been established, but compensation incentive and restriction mechanism is not perfect. This paper argues that Incentive compensation cannot make the senior executive interest be achieved. The incentive compensation can’t control moral hazard and adverse selection problems that caused by Incentive invalid. These situations moved in a vicious cycle. Second, the improved performance of the company can advance executive compensation. At the same time, we find Executive compensation has positive feedback effect to company performance.Third, the company’s equity incentive has the potency to improve the effectiveness of the performance.The empirical results show that the companies need to establish the evaluation standards that can truly reflect the overall performance. Through the combined accounting performance indicator and corporate market performance indicator, the pay-performance incentive mechanism will play an effectively role to solve incentive incompatibility problems which caused by agency problems. Simultaneously, because of a lower proportion of managerial ownership it can’t effectively solve the problemof moral hazard and adverse selection between executive and shareholders. If companies can moderately increase the proportion of managerial ownership and elaborate the influence of Equity incentive effectively, then the company can complementarily be promoted from cash compensation incentive and Equity incentive. These will change the structure of the unitary executive compensation, so potential effectiveness exits.Overall, according to endogenous perspective, analyze the relationship between executive compensation and corporate performance is a beneficial supplement based on existing research. The study results suggest that there is not a completely symmetrical affection between executive compensation and corporate performance. However, China and the west has a completely different institutional background. Therefore, to better understand the causes and consequences of symmetrical affection between executive compensation and corporate performance, future studies should focus on the unique China’s characteristics of the institutional environment, such as equity structure.译文：基于联立方程模型的我国上市公司高管薪酬与绩效关系实证研究摘要:高管薪酬作为一种潜在的重要内部激励，逐渐成为研究的热点。

外文翻译原文Salary affect how performanceMaterial Source：Executive Compensation; 2010/2011 Supplement, Author：ModernHealth The SEC has amended its disclosure rules to require, among other matters, a discussion about a company’s compensation policies and pra ctices for all employees if they create risks that are “reasonably likely” to have a material adverse effect on the company, taking into account program features and other factors that mitigate or counteract such risks.The SEC referred in adopting the amendments, indicates that the “reasonably likely” is higher than “possible” but lower than “more likely than not.”That said, a conclusion that the disclosure trigger is not met necessarily rests on an assessment of the balance of risk and reward implied by the company’s compensation program design and incentives, taken as a whole. As with many SEC rules in the post-SOX era, process will be key. A predicate for analyzing the disclosure question will be an inventory and review of the operation of compensation programs for all employees, which should be undertaken promptly in light of the effective date of the rules.In light of regulatory and investor interest arising out of the turbulent climate of 2009, we believe that a focus on the relationship between compensation and risk-at the executive and broad-based levels—will continue. Because this relationship may not always be obvious, even though it is implicit in virtually all significant compensation decisions, we suggest below practical considerations relevant to compensation committee deliberations about these matters.Core Compensation Committee Responsibilities and Risk Compensation committees have four principal responsibilities that intersect with risk, as discussed below.(1) Determining compensation program design.Diversity of compensation opportunities and metrics is the most effective tool to cabin risk implied by a company’s compensation program. A balanced mix of short-and long-term elements ties compensation to the company’s performance, While reflecting the perspective that near-term actions are not only important in and of themselves, but also can have material long-term consequences. A combination of incentives to reward different aspects of the company’s performance also avoids a myopic focus on a single aspect of performance at the expense of other considerations that concern and impact business risk. With in this framework, long-term compensation elements ( e.g. , plans with multi-year targets or performance vesting conditions) generally shoul d have a horizon tied to the company’s business planning cycle to ensure that the committee and management are driven by a common perspective about the company’s prospects and challenges within the context of a board-vetted business plan. In considering plan design, the compensation committee should take into account other features of the compensation program that mitigate the risk of management misconduct or inappropriately risky behavior. These include claw backs and long-term stock ownership requirements. These features of compensation programs have become common in recent years. They should be re-examined periodically and in connection with material changes in business circumstances or compensation plan design. Are the claw back triggers calibrated to th e company’s circumstances and business-rather than being a photocopy of another company’s policy or someone else’s idea of best practice? Are they clear in their operation, while preserving the committee’s ability to exercise its business judgment in deter mining whether to seek compensation recoupment? Given the level of equity incentives granted or to be granted, should stock ownership guidelines be revised to include a “hold through retirement” provision?Moreover, the committee should consider whether the categories of employees covered by specific compensation programs are appropriate in light of overall pay elements and job responsibility and function. For example, if authority to make decisions that may have material risk consequences for the business extends to a relatively broad group of employees, it may be appropriate to incorporate diverse company-wide performance criteria with respect to a similarly broad group of employees, as compared to relatively narrow business unit performance criteria, in order to mitigate the incentive of employees to take inappropriate business unit risks.The committee also should consider the role of its discretionary judgment in determining the amount of performance-based compensation to be paid, as contrasted with strict adherence to objective performance-based formulas. Focus on therequirements of Section 162(m) of the Internal Revenue Code of 1986 generally has oriented committees towards a more formulaic approach to compensation decisions. While such an approach arguably should result in a closer correlation of pay to performance, persuasive arguments can be made that the exercise of committee discretion can be consistent with a pay-for-performance program while at the same time mitigating inappropriate business risks that might otherwise arise from certain performance based compensation programs. In many circumstances, there are approaches to Section 162(m) compliance that permit committees significant discretion to adjust payouts, upwards or downwards relative to objective formulas, to reflect subjective evaluations of performance.Committees also regularly exercise discretion to adjust final awards if the results of strictly formulaic metrics would be either too low or too high.Finally, in reviewing the risk- appropriateness of its compensation program, the committee should invite its compensation consultant and other advisors to provide perspectives about whether and how well the company’s compensation program operates to balance risk and reward and whether other design features are appropriate in light of the company’s particular circumstances and peer group practices.(2) Setting the performance matrix for incentive plans.The compensation committee may be charged with approving threshold, target, and maximum le vels of performance and payout “curves” under the company’s incentive plans, depending on their terms. Determining these plan design features is critical in translating strategic goals into incentives that are calibrated to promote the right kind, and the right amount, of risk-taking by executives. Given the significance and complexity of this responsibility, we discuss setting the performance matrix in more detail below.(3) Understanding compensation-related risk in the context of other mitigating controls and procedures.The compensation committee must refl ect on risk implied by the company’s compensation program through the lens of other risk-mitigating controls and procedures. While listed last, this may in fact be the best first step in the committee’s process, so that the overall “risk lens” is in place on an early and ongoing basis. Other mitigating controls and procedures can include the board’s own risk oversight mechanisms, whether in the form of “enterprise risk management” initiatives, an annua l strategic review or the work of the board’s other key standing committees,such as the audit committee or, if they exist, the risk, compliance, or finance committees. Also relevant are the operation and effectiveness of the company’s internal control over financial reporting, financial policies( e.g. , those addressing leverage, capital allocation, and use of derivatives), controls around areas of subjective judgment within the financial statements and dedicated management functions directed to risk.To the extent that this information is not available to the compensation committee either directly or through the work of the full board, it should consider other means to assure an appropriate ongoing understanding of these risk, such as through overlapping membership or other formal interaction among the board committees that bear responsibility for elements of risk oversight, or by those committees and the full board.译文管理层薪酬对公司绩效的研究资料来源：薪酬补偿 2010/2011 增补作者：摩登.海瑟美国证券交易委员会已修订其披露规则要求，关于一个公司的薪酬政策和做法，对所有员工进行讨论，如果他们创造的是“合理地可能”有对公司造成重大不利影响，可以同时考虑到方案特征和其他因素，减轻或抵消这种风险。