Research On Financial Listed Companies Senior Management Compensation Structure And Corporate Performance Correlation

The global financial crisis caused by the U.S. "sub-debt crisis" has made people more concerned about the situation of corporate governance of listed financial companies. As an important part of corporate governance, the compensation of senior management was also caused for concern. However, due to limited listed financial companies in China and data was relatively difficult to collect, so the research about the correlation between the compensation of senior management and corporate performance was relatively few,and the scope of the research also focused on senior management pay and corporate performance correlation, rather few research of their interactions (ie, senior management remuneration endogenous), has limitations.This paper reviewed the related documents, disscussed the theoretical basis of the senior management compensation incentive, and analyzed the relevant factors whcih impact of executive pay levels and structure. Then classify the Financial listed companies as banks and non-bank corporations,utilized regression-by-empirical testing to find the correlation among compensation level and structure of the senior management and the corporate performance with panel data.Found that there is a certain degree of interaction between the three variables in the listed banks.There is positive correlation between the compensation level and the corporate performance at 1% statistical significant.Mutually,corporate performance positive impact the management compensation level at 5% statistical significant,and there is no interaction between the holdings ratio of the seninor management and corporate performance.But there is no interaction between the three variables in the non-bank corporations. To eliminate the impact of interaction, we utilized simultaneous equations to confine the interaction of the three variables in the banks.Found that the management compensation level positive impact the bank performance,and there is no statistical significant between the the holdings ratio of the seninor management and corporate performance. Thus, we concluded that increasing the proportion of management ownership is a good method to resolve the conflict between shareholders and managers. we believe that in listed financial companys management ownership incentive have some positive effect, but not as we assumed, should explore other incentive means,adopt a more effective evaluation systems and draft effective standards to encouraging the company's management actively involved in the company's decision-making. At the same time, due to the performance metrics of listed financial companies was not perfect, making the effect of management incentive compensation has yet to be strengthened. Therefore, it is top priority to establish a suitable system for assessing the financial performance.