Executive Compensation And Operating Performance Of Listed Companies Research

Top-management compensation problem derives on the separation of ownership and control in modern enterprises; there are many problems such as different objective, information asymmetry which exist in modern enterprises between owners and top-management. The complexity and uncertainty of operating enterprises urged the ponderance of this problem; we can solve it through signing pay-performance contract with top-management, designing and carrying out a benign compensation scheme. In knowledge economy era, the competition among enterprises in essence is the competition of person with ability; executive especially excellent executives become the core resource of modern enterprises, because of the particularity of executive human capital, how to motivate, attract executive and enhance the profits of enterprises is key to development of enterprises, furthermore, top-management compensation has this effect.This paper integrates related theories such as agent-principal theory, human capital theory, justice theory, etc, adopts the method combines normative study and empirical study , in the basic of sum up of former literatures, construct a analysis framework of top-management compensation motivation in a general way, then study the relationship between the top-management compensation and performance of the listed companies, using statistical description analysis and hypothesis testing analysis.The paper take all the listed companies from 2004 years to 2006 years in Shanghai and Shenzhen stock exchange as the overall sample, carry on the description statistical analysis to the overall condition and characteristics of the top-management compensation of listed companies. Then we continue to do the further regression analysis research. Main conclusions are: the firm performance is significantly positively related to the top-management compensation, show that incentives of top-management is working; corporation performance (including long-term and short-term) is weakly positively related to the equity held by top-management, the incentive mechanism of the equity held by top-management has been established ; top-management compensation is significantly positively related to the firm performance, the size of the corporate assets and the equity held by top-management, but negatively related the concentration ratio of the first shareholder. Finally, on the basis of the theory and regression analysis before, we explore an improved model of top-management compensation.