Abstract: Enterprise managers are of dual preferences of power and compensation. Power and compensation are interdependent and influence managers′ behavior jointly. Based on the characteristics of power allocation and compensation design for China′s enterprise managers, this paper makes a general analysis of the influence of power and compensation on managers′ behavior, and constructs a unified analysis framework of managers′ behavior. Comparative static analysis shows that: power connection could produce effects such as control right and reputation incentive, protective governance, relationship network resources and stable leadership structure, while it may cause negative effects such as lack of checks and balances, distortion of behavior targets and energy dispersion; compensation incentive has positive impact on managers′ behavior, but it may also lead to new agency conflicts; from the perspective of motivation and responsibility, compensation incentive can strengthen the positive influence of power and restrain negative effects, and it is helpful to regulate managers′ production behavior when power and compensation are matching.

Key words: power connection, compensation incentive, managers′ behavior, comparative static analysis