Empirical Study Of Senior Management Compensation, Equity Incentive And Corporate Performance

There is a fundamental characteristic of separation between ownership and management rights to Modern corporate governance structure. There are inconsistencies between company owners and managers in the objective function, and many other issues of asymmetric information, and the company's increasingly complex business and uncertainty is exacerbated by the conflict between the two. In the rapid economic development today, the competition between the companies actually compete for talent, and senior managers as a corporate high-end talent, the ability to play to their greatest value will be affected the success of business to some extent. How to attract good executives into the enterprise and make it through effective incentives to work hard to create greater value for the company has become an important topic on modern corporate governance.This article started a point in the review based on the results of previous studies, using a combination of methods on standardized analysis and empirical analysis to test and analyze executive compensation, equity incentive and corporate performance as well as the relevance of executive compensation related factors. There were five major conclusions as the following.First, executive pay and company performance was significantly positively correlated, indicating that the form of monetary incentives are effective executives, managers pay raise in favor enhancement of corporate value.Second, executives and firm performance has a definite positive correlation, indicating that the managerial ownership is conducive to a certain extent, improve corporate performance, but the empirical results of this paper is weak and unstable, can explain the equity of listed companies incentives for executives still in the initial stage. Third, executive pay and corporate assets size has a positive correlation, the interaction between the two shows larger companies willing to pay managers more pay, but managers are keen to continue to expand the size of the business.Fourth, the proportion of executive pay to its own positive correlation between ownership, managerial ownership will lead to a higher proportion of the company to maximize the value of its own objectives, and enhance the value of the company will be beneficial to the greater remuneration.Fifth, executive compensation and corporate ownership concentration is positively correlated, indicating that in our country, as the company increased ownership concentration, large shareholders and the company will become a higher degree of correlation, large shareholders have motivation and ability to further improve corporate governance in order to design more reasonable executive compensation incentives to stimulate the potential of executives so that they contribute to maximize the value for the company.This content and the basic structure as follows.The first part of the introduction, describes the background and significance, describes the structure of this arrangement, method and article of the important and difficult.The second part of the literature review, brief summary and review of foreign and domestic in executive compensation, equity incentive and corporate performance and executive compensation-related determinants of research results has been made.The third part of the relevant theoretical basis, mainly on the company executive compensation, equity incentive associated with the major theories, including the principal--agent theory, human capital theory, theory of internal and external corporate governance, executive pay incentives for the mechanism of the inner theoretical foundation and empirical analysis of bedding, to illustrate the theoretical basis based on the institute.The fourth part of the study design, first proposed five basic assumptions of this article, and then the text is selected explanatory variables, explanatory variables, control variables were explained in detail, the last in combination with previous studies, this paper builds on the overall return of the two models.The fifth part of empirical analysis, First, sample selection are described, followed by the relevant variables of the main descriptive statistics and correlation analysis, the final empirical analysis of samples to test the preceding assumptions are justified.Part VI conclusions and recommendations, in the light of empirical research based on the results, draw conclusions and put forward countermeasures and suggestions.First of all, selected the most representative 280 listed companies in Shanghai and Shenzhen year of 2007-2009as sample, the sample covers the span of space and time, the performance of listed companies can sample the relationship between executive pay and a comprehensive and in-depth inspection. Secondly, the performance of listed companies, executive compensation, managerial ownership and other relevant data were detailed and comprehensive statistical analysis of empirical testing. Finally, the sample of listed companies on executive compensation-related determinants of a more detailed analysis and empirical testing by analyzing company performance and executive pay to find out the internal relations to explore the establishment of long-term executive compensation incentive mechanisms. Deficiency lies in the following two points: On the one hand the selection of the sample does not cover all the A-share listed companies, the time span of only three years, which makes this the study has insufficient depth and breadth; In addition, the paper focuses on the empirical research on executive pay and the listed companies in internal corporate governance mechanisms analysis not only in the data analysis based on empirical tests, and draw the final conclusion.