Research On Correlation Between Top-management Compensation And Performance

In recent years, with the agency theory arising, the new situation of corporate governance is gradually emerged brought by profession managers, but the contradictions and conflicts have become increasingly clear, and the compensation of top-managers is becoming one of the focus of public discuss. Meanwhile, the correlation between top-management compensation and performance is focused by the academic and business. There are a lot of researches which have been studied by scholars in china and foreign about this project. Economic crisis in 2008 have a great impact for the performance of listed companies. Then, how does the correlation between top-management compensation and performance change after the economic crisis in 2008? This paper will study the correlation between top-management compensation and performance from theory to practice, using the data from annual reports of listed companies in 2008 and 2009.Firstly, the chapter states briefly the research background, significance, frameworks and methods of this paper;Secondly, this chapter summarizes the literature review about top-management compensation and performance domestic and foreign, and defines some related theories;Thirdly, the chapter analyzes the correlation between top-management compensation and performance of listed companies, with the way of combination of normative and empirical. First of all, learn the status of the top-management compensation using statistical analysis approach and analyze descriptively top-management compensation in different industries. We find there is a big gap in different industries about top-management compensation. And then, we analyze the data about top-management compensation and performance of listed companies in 2008 and 2009,using the way of empirical. It is concluded that:there is a significant positive correlation between top-management compensation and performance of listed companies, and it is more relevant in 2009 than that in 2008, whether considering the factor of the size of the company, debt risk, ownership concentration and the industry or not.Finally, for the above conclusion, the chapter put forward some proposals, such as draw up incentive compensation increasing the matching between top-management compensation and performance, develop the reasonable indicators according to creating external environment, and determine compensation diversely and so on.