Listed Companies On Executive Compensation And Corporate Performance Relationship Empirical Research

Entrepreneur is the most important and special human resources in enterprise. Constructing a scientific and reasonable entrepreneur incentive system is not only realistic problem to enterprise reform especially to state owned corporation reform, but a research focus in scholarly communities, and that the executive compensation system is the key of executive incentive system.Based on the of this background, The paper choose the relationship between executive compensation and corporation performance as the research object. In my opinion, the executive compensation system should include two parts by analysis of the agency relations in corporation. One is fixed, and the other is floating pay. This arrangement can reduce agency cost and improve corporation performance in condition of uncertain environment and information asymmetry. This paper chooses 201 public companies in eight industries from Shanghai Stock Exchange as the positive research sample. It finds out that the bi-directional positive correlation has been formed in Chinese public companies by analysis of the relationship between executive compensation and corporation performance in 2002. It indicates that the corporation performance has been the important decision factor of executive compensation. At the same time, the executive compensation has also been the important incentive factor of improving corporation performance. But from positive research, the paper finds that the stock that is used widely in American and Europe has not been an incentive factor in Chinese public companies because the executive has small stock even no. The last chapter provides some suggestions of improving executive compensation system.The research provides positive supports to construct scientific and reasonable executive compensation system, and that gives theoretical analysis foundation and positive conclusion supports to enterprise.