The Research On Effect Of Top Executive Compensation Structure On Corporate Performance

Corporate executives are the most important and most special human resources; they play a key role on the development of enterprises, the enthusiasm of executives dependent on the effectiveness of incentives at a large extent. Therefore, incentive mechanism of executive's remuneration is a hot issue for theoretical research and the practice of enterprise. Research on executive's incentive problems has been about the relationship between the level of executive pay and corporate performance. This paper explores the relationship between salary structure and corporate performance, attempt to enrich the motivation theory of executives and to provide theoretical support for the practice incentives of executives.According to the results of questionnaire survey, we founded that top executive salary structure is mainly based on short-term salary and the proportion of flexible salary in the total pay is a bit high; Top executives consider the"base salary plus equity or options"for their largest incentives, followed by the"base salary plus performance pay". The main problems of top executive remuneration structure are the lack of long-term incentives and lower satisfaction with pay structure. Top executive compensation structure (pay composition and the ratio of it) has effects on behavior choice and level of effort, and behavior choice and level of effort influence enterprise performance. Accordingly, the paper proposed conceptual model and research hypothesis; we conducted questionnaire survey to collect data for our research. Questionnaires include the salary structure and corporate performance, collecting research data by investigating, doing relevant analysis for sample data through the use of spss13.0.Results indicated that fixed salary system is negatively correlated with corporate performance, Flexible salary system, short-term salary system, the long-term salary system and corporate performance are positively related. Satisfaction of the ratio of pay composition and corporate performance is not significantly related.According to empirical results and demand for executives pay, this paper put forward the following three suggestions on the design of executives incentive mechanism. Firstly, to establish long-term incentive plans; Secondly, to design a reasonable proportion of flexible salary;Thirdly, to design the rational performance evaluation system.