A Study on Confirmation Model of Surplus Profit Sharecropping in Light of Monitoring Cost and Self-Discipline Level

In reality, when the manager influences the production of corporations in an inestimable way, the more self-disciplined he is, the more dependent his income is on the enterprise´s production and the more unlikely he is directly monitored. However, the traditional confirmation model of surplus profit sharecropping neglects monitoring strength, monitoring cost and the manager´s self-discipline. On the basis of constructing and analyzing a theoretical model, the present thesis obtains ß, an incentive ratio, which includes monitoring cost implicitly, and reflects monitoring strength, is relevant to the manager´s self-discipline and has some effect on explaining practical limitations of high salary incentive contract for senior executives.