The Empirical Analysis Of The Executives Incentive Compensation And Corporate Performance In The High-tech Companies

The 21st century is the era of knowledge economy, as the main pillars of economy developing, the high-tech industries play an increasingly important role. In developed countries, the high-tech industry plays a leading role in driving the developing of economy. In China, it is gradually increasing its contributions to the developing of national economy, it is a new and important industries which are driving local economic development in China. In this emerging industry, the senior executives as the key person of business decision, have to face with constantly updated information technology. Compared with the traditional industry leaders, they must take more challenges. It also can say, in the high-tech industry, senior executives are the core of the companies, the key of the developing of companies, and the most valuable resource. The question of inciting and binding senior executives has been plagued economists, management theorists and practitioners of their corporate business for many years, however, the question can not be resolved in the new industry, on the opposite, it not only can not be avoided, but play a more important role than in the traditional industry. Nowadays, the situation of motivating senior executives is not optimistic. The high incidence of "59-year-old phenomenon", "management astronomical salaries" and other phenomena remind us that we must immediately construct and improve the inspiring system of senior executive. Constructing a reasonable inspiring system of senior executive and streamlining the distribution relationship of the public companies play an important role in solving the specific authorize-agent problems of our country and maintaining the healthy and stable capital market.This passage begin with the authorize-agent theory, modern human capital theory, motivation theory, and theory of Championship. Canonical analysis and empirical analysis are the main analysis methods, and in this passage we use empirical analysis more. The purpose is to study the relationship of senior executive salaries and corporate performance in high-tech companies.This paper firstly introduces the background and significance, writing and research methods. Then reviews the researching points of the domestic and foreign scholars on the relationship between the senior executive salaries and corporate performance, and the points were classified into two parts, according to the relationship is existed or not. not only that, the paper also review the researching point of Chinese scholars on the relationship between the senior executive salaries and firm performance studies degree in high-tech industries.. Then based on relevant theories are expounded respectively, expounds the principal-agent theory, human capital theory, incentive theory and the theory of this championships, and the related concept. according to selected 109 high-tech companies in 2007-2009, the passage raised three hypotheses, to study the relationship between the senior executive salaries and corporate performance. The part of empirical study was divided into two parts. The first part took a descriptive analysis on the overall distribution of sample data; followed by a linear regression model, which take a regression analysis on this topic. Chapter V take a further analysis to the empirical results,and made a conclusion, then give some suggestion to establish a rational system of executive compensation.In the part of empirical study, this paper study the relationship between the annual salary paid of senior executives, managerial ownership and the pay gap within senior management executives and corporate performance, the results show that the relationship between senior executive compensation and corporate performance in Chinese high-tech companies is very significant positive, and the relationship is very stable, it will not change as the time go. This shows that Chinese high-tech companies can get more return from using monetary incentive method to the senior executive of the companies. There is a certain positive correlation between the Managerial ownership and corporate performance, but from the point of statistical view, this positive correlation is not very significant, and as the indicators change, the relationship will also change. This indicates that the Management Ownership played a role on the growth of corporate performance, but because of its scope and extent are not satisfying, and Chinese relevant laws and regulations constraint Managerial ownership, so it is difficult for Managerial ownership to play their proper incentives. The pay gap within senior management and company performance showed significant positive correlation, this finding validates the results of previous studies that the theory of Championship can be proved in Chinese high-tech industries.According to the results of empirical study, combined with the situation of the high-tech industry, which is that the share reform in China has been successfully completed and the stock market increasingly legalized and standardized today, I believe we can not only strengthen the use of monetary rewards on executive incentives but also can reasonable increase the range of long-term incentives like managerial ownership and so on. And then according to the company's actual situation, combined with internal and external environment, we also can expand the pay gap within senior management executive, so that it can play a more effective incentive for its role. Establishing a deep, diverse executive compensation incentive system is the final purpose.