A Study On The Executive Incentive System Of High-tech Enterprises In China

In the times of knowledge economy, with knowledge playing a more important role in economic growth, many countries pay much attention to high-tech industry development. High-tech enterprises are the microcosmic base for high-tech industry. Their executives are the main body and the center and the precious human resources of enterprises. Therefore, it is of great importance for high-tech enterprises and consequently for China, who is devoting considerable efforts to developing high-tech industry, to make clear what incentive systems can attract and keep excellent executives. After entering WTO, China will confront fiercer competition for human resources. Due to the reasons mentioned above, more attention should be paid to incentive problems of talented people.Based on reviewing the relevant research both of China and abroad, using positive and normative approaches, the thesis is about a study on the executive incentive system of high-tech industry in China, with the agent theory, human capital theory and executive compensation theory as basic theories. The good data source is provided because of information disclosure institution of listed companies, and we select 69 companies listed in Shanghai and Shenzhen Stock Market as the sample firms. With descriptive approach, we firstly analyze the compensation incentive system of executives, such as the compensation structure, compensation form, compensation level. With hypothesis-test approach, through two linear regression models we then discuss the relationship between executive compensation and firm performance to examine the effectiveness of the present compensation and analyze the factors affecting monetary compensation. In addition, we set forth the roles which other internal incentive factors except compensation play. In accordance with the various development stages, we further expound the incentive problem of the executives in non-listed high-techenterprises with normative approach to avoid too high costs of collecting data due to lack of corresponding disclosure institution. Based on these, we get the following results:? In the listed high-tech enterprises of China, the compensation structure of executive is not rational enough, and the stock-based incentive means are lacking; the yearly monetary income of executives functions to a certain degree, but the proportion of stock held by them is too low and the stock-based compensation takes no incentive effect; there is a significant relationship between the annual monetary compensation of executives and two factors: l.firm size, 2.EPS.? On various stages of the small and medium-sized enterprises development, the incentive problems of executives still exist, but the forms are different.Based on the main incentive system problems existing in high-tech enterprises-lacking stock-based incentive means and motivation failure, we propose two new stock-based incentive means: stock options and phantom stock, and analyze their advantages in high-tech enterprises.