In recent years, the issue of the remuneration of state-owned enterprise executives has frequently sparked heated debates. For example, the salary of the chairman of Huafa Co., Ltd. in 2008 was 7,327,400 yuan, and the salary of the chairman of Huayuan Real Estate in 2010 was as high as 7,581,700 yuan. The excessively high salary levels of these state-owned enterprise executives have caused huge controversy in all sectors of society. However, Lu Zhengfei et al. (2012) found that on average, there is no significant difference between the salary levels of state-owned enterprise executives and non-state-owned enterprises. It can be seen that the annual salary of some state-owned enterprise executives is too high and should be a structural issue. Then, in addition to the more obvious factors such as industry monopoly, what are the important factors that cause the annual salary of some state-owned enterprise executives to be too high? In-depth study of this issue will solve the problem of excessive compensation for some state-owned enterprise executives. The problem of improving the salary incentive mechanism of state-owned enterprises is of great significance. The study of Chinese state-owned enterprises must be rooted in China's unique institutional background. In the institutional environment of China's transitional economy, there is a close relationship between enterprises and governments. This connection, we usually call it a political connection. In general, the political connection of a company is played through executives with a political background. In state-owned enterprises, politically-connected executives can make it easier for companies to get government help, and they are more likely to be subject to more government intervention and more policy burdens (Fanetal., 2007). With more government intervention, corporate governance of politically connected state-owned enterprises is poor (Fanetal., 2007). Then, under the weak corporate governance mechanism, will these politically-linked state-owned enterprises pay too high a salary to their executives, and if so, what would be the high executive compensation that would affect the company’s future business performance? Alike, a large number of studies have found that in addition to state-owned enterprises, political connections are also common among non-state-owned enterprises. However, unlike state-owned enterprises, the goal of maximizing the profit of non-state-owned enterprises determines that the purpose of hiring senior executives with political background is to obtain the results of the phased research of the National Natural Science Foundation of China (approval number, 71172141 and 71172041). At the same time, it was supported by the Ministry of Education's Humanities and Social Sciences Key Research Base Major Project (Grant No. 12D790033) and the Shanghai University of Finance and Economics "211 Project" four key discipline construction projects. Responsibility. Get the benefits and benefits. Since executives with political backgrounds can help companies get excess returns in the process of rent-seeking from the government, will they receive higher pay in return, and if so, politically-related non-state-owned enterprises What kind of impact will high executive compensation have on the company's future operating performance? Taking the listed companies from 2001 to 2011 as a sample, this paper empirically studies the executives' political relations with their compensation levels among companies with different ownership characteristics. The impact and the impact of this impact on the company's future performance. The study found that executives of politically-linked companies received significantly higher salaries, both in state-owned enterprises and in non-state-owned enterprises. However, in state-owned enterprises, the excessive salary caused by political connection is significantly negatively correlated with the company's future performance; in the case of non-state-owned enterprises, the opposite is that the excessive salary caused by political connection is significantly positively correlated with the company's future performance. . These results indicate that executives of politically-linked state-owned enterprises have received excessive pay, while higher-paying by politically-linked non-state-owned executives is a kind of compensation and incentive for their strong rent-seeking ability. In addition, the progress test found that in the state-owned enterprises controlled by the central government, and in areas with strong government intervention, the excessive pay of state-owned enterprise executives of political connections is more serious. The main contributions of this paper to the existing ones are as follows. First, on the basis of comparing the difference in executive compensation between state-owned enterprises and non-state enterprises in Lu Zhengfei et al. (2012), the progress of this paper examines the impact of political connections on executive compensation in companies of different ownership types, thus empirically discovering political connections. It is an important factor leading to excessive salary of some state-owned enterprises. This will help us better understand and solve the problem of excessive salary of some state-owned enterprises. Second, although research by Liu Huilong et al. (2010) shows that political connections reduce the sensitivity between executive compensation and company performance in state-owned enterprises, it is not clear whether the executives of politically-linked enterprises are insufficiently motivated or It is excessive salary incentives. The research in this paper shows that the executives of politically-linked state-owned enterprises have obtained excessive compensation, while the higher returns of politically-linked non-state-owned executives are the return of their strong rent-seeking ability. This step further deepens our understanding of the executive compensation incentive mechanism of listed companies in China. Finally, previous studies on political connections often only looked at private enterprises or state-owned enterprises alone, and rarely compared the influence of political connections on the same issue among different ownership enterprises. Zheng-94- As pointed out by Liu Huilong et al. (2010) and Chen et al. (2011), the formation of political connections and the mechanism of action are different in enterprises of different ownership nature. They do not distinguish between the types of ownership of enterprises and examine political connections. The role of it is likely to lead to contradictory and even wrong conclusions. Therefore, this paper also examines the impact of political connections on executive compensation in state-owned and non-state-owned enterprises. Moreover, this paper finds that although political connections are associated with excessive executive compensation, the causes and consequences of higher pay due to political connections vary among firms of different natures. This will further enrich our understanding of the different mechanisms of action of Chinese corporate political connections in companies with different property rights. The following contents of this paper are arranged as follows: The second part introduces China's relevant institutional background, and conducts theoretical analysis and research questions; the third part introduces empirical test models, research samples and data sources; the fourth part empirical test and analysis politics The impact of the association on the executive compensation level; the fifth part analyzes the relationship between the excess salary caused by the political relationship and the future business performance of the enterprise, in order to distinguish the difference in the influence mechanism of political association on executive compensation in different ownership enterprises. The sixth part analyzes the impact of different government control levels and different regional institutional environments on the excessive salary of politically-related executives, and tests the main results of this paper. The seventh part is the conclusion and enlightenment of this paper. II. Institutional Background, Theoretical Analysis and Research Issues Although China's market-oriented reforms continue to move forward, in the context of the transitional economy, the government still plays an important role in economic activities, and there is still a great deal of economic resources. Impact. Therefore, companies and governments often maintain close ties. In academia, we usually call it the political connection of a business. Many studies have found that the political connections of Chinese enterprises are relatively common, and political connections have an important impact on the behavior or value of enterprises (Fanetal., 2007; Wu Wenfeng et al., 2008; Yu Minggui, Pan Hongbo, 2008; Wu Wenfeng et al., 2009; Luo Party Theory, Tang Qingquan, 2009; Yu Minggui et al., 2010). However, with the deepening of research, scholars in recent years have found that in different types of enterprises with different property rights, the formation and mechanism of corporate political connections are different. For example, Liu Huilong et al. (2010) found that in state-owned and non-state-owned enterprises, the impact of political connections on executive compensation incentives and employee redundancy is different. Chen et al. (2011) show that the political linkages of state-owned enterprises will reduce their investment efficiency, while the political connections of private enterprises have no significant impact on investment efficiency. As pointed out by Liu Huilong et al. (2010), it is very likely that conflicting conclusions will be obtained by not distinguishing the nature of the property rights of the company to examine the differences in the role of political connections. Therefore, consistent with the above research, this paper will analyze the impact of political connections on executive compensation levels and its economic consequences in China's special institutional background. The ultimate controller of state-owned enterprises is the government. However, the government is not only a major shareholder of state-owned enterprises, but also a manager of social affairs. From the perspective of social affairs managers and the incentives for political promotion of government officials, the government has the motive to internalize a large number of social and political goals into state-owned enterprises, allowing state-owned enterprises to develop regional economies, solve employment, and maintain social stability. Target and service. These government interventions clearly conflict with the goal of maximizing corporate profits, which leads to a decline in the economic efficiency of state-owned enterprises. Because of this, with the deepening of state-owned enterprise reform, the governance mechanism of state-owned enterprises is gradually improving, the government's intervention behavior of state-owned enterprises is limited, and the cost of direct government intervention in enterprises is gradually increasing (Fanetal., 2012). However, under the current institutional background of China's transitional economy, it is still difficult to completely eliminate government intervention in state-owned enterprises. Moreover, because the government still holds the power of appointment and dismissal of state-owned enterprise executives, through the appointment of senior management and other personnel arrangements, the government can still guarantee its effective control and substantive intervention in state-owned enterprises. From the government's point of view, appointing current or former government officials to serve as executives of the company, or giving company executives a political identity, shows that the government has strong incentives for political intervention and hopes to strengthen it through politically connected executives. Control of the company to achieve its political goals (Wang Qingwen, Wu Shinong, 2008). Therefore, although it cannot be ruled out that state-owned enterprises can also seek rent from the government through politically connected executives, in state-owned enterprises, the government is more likely to intervene through politically connected executives. In fact, Fan et al. (2007) pointed out that among Chinese state-owned listed companies, whether executives have political connections is a good proxy variable reflecting the degree of government intervention. Moreover, their research found that, due to more government intervention, state-owned listed companies with political connections have significantly worse market performance and accounting performance in the three years after the IPO than companies without political connections. Since for state-owned enterprises, government intervention can be achieved or strengthened through politically connected executives. Then, for this part of the politically connected executives, will their salary contract arrangements be different from other companies? According to the general economic theory, the purpose of executive compensation incentives is to promote their consistency with the shareholders' goals. Therefore, in order to achieve the goal of maximizing shareholder wealth, the core of compensation incentives is to link executive compensation with corporate performance. However, politically-linked state-owned enterprises have undertaken policy burdens and social goals such as ensuring employment and maintaining social stability due to more government intervention. Their company performance indicators are difficult to reflect the efforts of corporate executives and enterprises. contribution. Therefore, the role of earnings information in the performance evaluation of executives will be weakened, leading to a decrease in the sensitivity of executives and performance of politically-owned state-owned enterprises (Liu Huilong et al., 2010). This lower pay-performance sensitivity will give executives room for opportunistic behavior. On the one hand, since in the politically-linked state-owned enterprises, the relationship between executive compensation and corporate performance is ambiguous, that is, the amount of compensation is not related to business performance, so these executives can have the opportunity to pay more than the company's performance. Part of the pay. Especially when the business performance of the company is poor, these politically-related executives can also use the excuses of more government intervention to shirk their responsibilities, thus still obtaining higher salaries. At the same time, because corporate performance is difficult to measure the level of effort of executives and their contribution to companies, and the quantitative relationship between their policy burden and their compensation is lack of clear standards, which also makes politically connected executives higher. The salary is possible. On the other hand, Fan et al. (2007) found that the state-owned enterprises with political connections have a poor corporate governance mechanism, which is reflected in the weak professional background of their board members, such as the majority of board members from the government and directors. The background of the relevant major and older. Weak corporate governance mechanisms will make these companies' "inner control" more serious, and executive decisions are difficult to obtain effective supervision and control. In this case, politically connected executives are more likely to pay higher salaries for themselves. However, in reality, there are also some factors that restrict the political connection of state-owned enterprise executives to obtain higher salaries. For example, Chen Donghua et al. (2005) believe that China's state-owned enterprises have implicit control over executive compensation. In the context of the annual “high price†of some state-owned enterprise executives in recent years, the Ministry of Human Resources and Social Security and other six departments jointly issued guidance on further standardizing the compensation management of central enterprises’ heads in September 2009, clearly defining the senior management of central enterprises. The annual salary shall not exceed 20 times the average salary of the employees. For state-owned enterprise executives with political connections, due to the implicit political promotion incentives, when they obtain higher monetary compensation, they may attract outside attention and criticism, thus affecting the promotion, they may give up to some extent. The current part of the economic remuneration, so as not to pay too high a high political cost. Based on the above analysis, in the state-owned enterprises, whether the executives of politically-related enterprises have received higher compensation, there is no clear expectation beforehand, which is more of an empirical problem. This will be empirically tested and analyzed below. Unlike state-owned enterprises, executives of non-state-owned enterprises are not appointed by the government, but are appointed by enterprises. The goal of maximizing the profit of non-state-owned enterprises determines that they are employed to create value for the company. Only when politically connected executives can bring economic benefits to the enterprise, non-state-owned enterprises will hire politically-elected executives to establish and maintain political connections. As mentioned above, under the institutional background of China's transitional economy, the government has a large amount of economic resources and plays an important role in the allocation of economic resources. Therefore, establishing a good relationship with the government can help companies obtain economic resources, so that non-state enterprises can compete with state-owned enterprises in the market and survive. At the same time, in the case of imperfect legal protection in China, the government can use various administrative means to formulate control measures and intervene in the operation of enterprises. Especially in some areas with low levels of rule of law, non-state-owned enterprises face greater uncertainty in production and management and property rights protection. In such an environment, in order to survive and develop, private enterprises also need to establish good relations with the government in order to obtain government protection and reduce future uncertainty. The important channel for a good relationship between a company and the government is to hire a government official who is abdicated as its executive, or the executive to seek political status, such as becoming a deputy or a member of the Chinese People's Political Consultative Conference. The political identity of executives can influence government decision-making through political participation, and there are more opportunities to form good relations with government officials, so that they can obtain rents from the government and obtain various economic resources. In fact, many have shown that privately-owned private enterprises can gain many benefits, such as tax incentives (Wu Wenfeng et al., 2009), financing preferences (ohnsonand 2006; Yu Minggui et al., 2010) and lower industry barriers (Luo party theory). Liu Xiaolong, 2009; Zhang Min and Huang Inheritance, 2009). In the end, political connections can inform the performance and value of private enterprises in 2006; Wu Wenfeng et al., 2008; Luo Dang, Tang Qingquan, 2009). Since politically-linked executives can bring these huge benefits to enterprises, private enterprises that pursue value maximization naturally have strong incentives to hire these politically-identified executives. Under the market competition mechanism, this higher level of access to government resources or policy rent-seeking ability of political-related executives will be priced by the market, that is, they will receive a higher salary. Therefore, this paper expects that among non-state-owned enterprises, the executive compensation of politically-linked enterprises is significantly higher than that of enterprises without political connections. III. Test Model, Research Samples and Data (I) Model Setting and Variable Definition In order to test whether the politically connected executives have obtained a higher salary level, this article refers to Core et al. (1999), Hwang and Kim (2009), Fang Junxiong. (2009) and Liu Huilong et al. (2010) used the following research models: Copier Toner,Best Ricoh Printer Toner,Newly Ricoh Printer Cartridge,Ricoh Printer Toner jiangmen jinheng office equipment Co. Ltd. , https://www.jm-jinheng.com