Entrepreneurs Pay And Firm Performance

Entrepreneur are special human resources in economic development and the growth of them in China is very crucial and of great significance to the domestic economic development. The executive compensation system plays an important role in promoting entrepreneur development in terms of supporting systems, which has received much popular attention recently in scholarly communities, both at home and abroad. The purpose of executive compensation is to have the executive growth adapted to the corporate performance, and effective executive compensation should be based on corporate performance. So in my opinion, the executive compensation incentive in conformability with the corporate performance is a really meaningful one and the growth of entrepreneur in conformability with the corporate' performance is the real growth of entrepreneur.The agency theory provides direction concerning pay-for-performance as a means of reducing agency costs and of enhancing the CEO's effort level. From the angle of agency relationship, the executive compensation incentive system can solve the agency problems resulting from the difference between the corporate ownership and executive's interests, and can thereby contributes to higher firm performance. After analyzing some concepts such as human capital, corporate and entrepreneur's human capital, this dissertation then analyzes the executive compensation incentive system in the modern corporate governance structure focusing on the corporate system change and the agency relationship after the "executive revolution".Firm theory argues that corporate is a complicated contract composed of independent assets such as capital and human capital. From the perspective of human capital theory, the entrepreneur human capital is a crucial factor affecting firm performance. Idiosyncratic entrepreneur human capital occupies a major position in the overall corporate production. The greater the firm's reliance on its human resources as a source of competitive advantage, the more important would human capital be as a contributing factor to firm performance. The idiosyncratic characters of the CEO human capital feature the characteristic of CEO compensation. The key factor in executive groups development is to identify the value of CEO's human capital and compensate CEO accordingly. This dissertation analyzes the relationship between CEO compensation and firm performance, argues the impact of CEO's human capital on the compensation, and discusses the principles of price-making of CEO's human capital. Furthermore, based on the international comparison and analysis of China's compensation system as well as some reform measures, it also explores the development of executive compensation system in China, with an attempt to analyze the development models for China's executive compensation system with the long-run compensation incentive as the core model.When analyzing some China's public companies, the characteristics of entrepreneur 's human capital is applied in the quantitative model of executive compensation, it also examines some human capital factors that affect CEO compensation such as age, education level, tenure and the length of service as CEO. In the positive analysis, this dissertation combines both the agency theory and human capital theory. Meanwhile, CEO compensation and firms' performance are usedas endogenetic variables while the specific variables of firms, governance structure, human capital characteristics and ownership structure variables are also applied to develop the models of two stage least square regression to analyze the relationship between the compensation system and firm performance in explaining the interdependence between CEO compensation and firm performance. Basically, the positive analysis has proved the theoretical analysis in this paper. And some tests to some assumption also indicate that the current practice of executive compensation in China does not completely embody CEO's value and their contributions. It finds out that the underdevelopment...