Empirical Research on Correlation between Salary Incentive Policy and Behaviour of Earnings Management of Listed Company Management in China

The salary incentive policy of listed company and its implementation management is an important means and method for our manager to solve principal-agent issues and problems of listed company, to reduce principal-agent cost, and to carry out the system of company incentive and restraint. Practice the performance of listed companies often have close relationship with what the management of the company had adopted a salary incentive policy in practice, and at the same time, behaviour of earnings management caused by the management would directly influence the performance of the company. The purpose of this paper is intended to test and prove that the policy of managerial salary incentive or compensation is related to behaviour of earning management indeed by using the public data of the year of 2009 in security market, and then the author have also put forward some policy suggestions in the end.