The Empirical Study Of The Relativity Between Listed Company Top Executive Salary And Company's Achievement

Separation of ownership and management of the modern enterprise, making the actual implementation of Corporate Affairs does not directly manage the enterprise. Instead, they have commissioned management executive follow the principal-agent theory, the separation of ownership and management of enterprises. And a commissioned agent, the owners employ their executives to manage the enterprise; corporate executives were under the direct authority of the owner. Separation of powers so that the main interest of a division, the client is to maximize operational performance. and the agent's goal is to maximize their personal interests, the interests of the two is not entirely consistent. And the both have different asymmetric information, so the agent clients has much more information than the owners. Different goals will lead to the loss of operational efficiency of enterprises, which will lead to representation. Owner of one of the effective ways to solve this problem is to establish an effective incentive-restraint mechanism Motivation factor reasonable arrangement, so that the agent in the pursuit of its own interests at the same time, maximizing the interests of the owner.From the point of view of business owners, consider how to determine reasonable salaries of the executive; executives and their salaries should be consistent with the development of enterprises; from the perspective of executives, executives should pay their own contributions to the line. And enterprise performance and the two are closely related. Therefore, both from the perspective of the business owners or executives from the point of view Performance measurement are an important criterion for reasonable pay executives. This shows that the establishment of enterprises and entrepreneurs consistent performance pay system is the key incentive and restraint mechanisms entrepreneurs.Since China's reform and opening up, because of the economy, corporate governance, internal conditions, and other factors, the problem of widespread lack of incentives and constraints of the weak have became a matter of policy. The incentive of executives becomes a theoretical study, explore and practice the hot issues of social concern. It is against this background of the environment, we must thoroughly study the issue of remuneration incentives for executives.The first part of this paper in this part is introduction; in this part the author described the research background and analyzed significance of this study from both theoretical and practical. The author pointed out that this paper could not only pay policy for executives in China, but also help the practice of encouraging enterprises to develop and provide the necessary theoretical basis for further in-depth study and analysis of foundation laid, and incentive mechanisms for internal analysis provide more convincing evidence, How to establish the optimal solution so executives pay incentive mechanism of this reality; Finally the author of the research paper on the ideas expounded.The second part of the paper is literature review, in this part, The author introduced the performance of domestic and foreign scholars in the study of the salary. Discussed agent from the perspective of the sensitivity of pay to performance. Contract reward executives for the performance evaluation of the manager's compensation structure and corporate governance perspective on the impact of domestic and foreign scholars Studies using this method. In those years, salaries and the performance of the company executives made a summary of the empirical research.In chapter III of this study, the authors have done a content analysis of the incentive pay and discussion Based on these theoretical and practical analysis and pay, putting forward a four-point hypothesis: Scenario 1: equity ratio is related to the performance of the company and management. Scenario 2: the performance of the company and are related to the management of salary; Scenario 3: executives, there is a positive correlation between pay and company size; Scenario 4: executives pay and the ratio of equity shares in China there is a negative correlation between high and low. Finally, the author gives the data used in this paper, and the indicators used in the model are as follows: EPS =β₀ +β₁MSR+β₂MWP+β₃GROW+β₄LEV+β₅SCALE+β₆NSR+εROE =β₀+β₁MSR +β₂MWP+β₃GROW+β₄LEV+β₅SCALE+β₆NSR+εIn the explanatory variable, with earnings per share (EPS) and net assets yield rate (ROE) to inspect the performance of the company; explanatory variable, we have chosen executives on average equity ratio (MSR). Selected executives'salary (MWP) as management incentive targets. To accurately inspect encourage executives to the company's performance, Models must also be in control of the performance of the company may change some of the main factors that have an impact on the basis of the relevant academic literature, We set up a model of the company's growth in research capacity (GROW), and financial leverage (LEV) Company size (IGBT) and the state-owned equity ratio (NSR), of which the company's growth capacity (GROW), the company said growth in net profit, to control potential risks and growth, = net profit growth rate is calculated as follows : (net profit this year-last year's net profit) / net profit last year; financial leverage (LEV) debt-to-asset ratio, used to control the performance of the company's capital structure, calculated as follows : debt-to-asset ratio = liabilities / total assets, company size (IGBT) to the natural logarithm of the company's total assets measured. Used to control the size of the company's performance. State-owned equity ratio (NSR) of state-owned shares in the proportion of the total share capital.Chapter IV is the important part of the evidence in this chapter, The author and salary equity ratio under different executives correlation between pay and company performance. Different asset size listed companies pay executives and the performance of the company as well as the correlation between the proportion of state-owned shares of listed companies pay executives This correlation between pay and company performance in the three areas listed company executives to study the relationship between pay and company performance. Positive results of the analysis, conclusions are drawn as follows: 1. The average performance of the company and the executives were weak positive correlation between the proportion of shares held, but through regression equation significant test. 1: An Empirical Analysis does not support the assumption that the equity ratio is related to the performance of the company and management 2. Annual salary is related to the performance of the company and the management, analysis and correlation coefficients in this regression analysis has been verified; Scenario 2: the performance of the company is related to the establishment and management of annual salary; 3, the greater the size of the company, the company's performance and the relationship between the CEO's smaller extent, The scale and incentive mechanisms that the company has an inverse correlation between the relationship. China's listed companies and small and medium-sized companies listed on the pay-performance contract are being established large listed companies pay-performance contract has not yet been reached. This resulted in the overthrow of our assumptions three executives: there is a positive correlation between pays and company size 4. Executives of state-owned shares, the holding company for state-controlled pay-related company with a low level is lower. The greater the proportion of state-owned shares, executives'pay - the correlation between the performances of the company will get worse. more incentive mechanism can play its due role, the more imperfect the contractual relationship. Therefore, we have reached a conclusion: The empirical results and our assumption 4: Executives and the proportion of equity shares in China there is a negative correlation between level of agreement.In the last part the author gave the conclusion, additionally, the authors summarized the findings of this paper and pointed out the future performance of the company pay executives in the empirical research related to sexual orientation. According to the corresponding empirical results and policy proposals...