The Impact Of Corporate Governance On Top Executives Compensation

Top Executives are the enterprise managers of important day-to-day affairs and themajor strategic decision-makers which is related to the success and failure to enterprises.In the increasingly competitive market, whether top executives compensation iseffective, and how to incentive top executives work for shareholders effectively andsolve principal-agent problem become hot problems. The research purpose of the thesisis verify the impact on top executives compensation and sensibility between executivecompensation and corporate performance corporate governance structure in China listedcompanies by empirical analysis.On the basis of the theories and literature reviews, we raise hypothesis and groupstate owned and private companies for comparative study. China listed companies as thestudy samples, we use descriptive statistics, correlation analysis, multiple regressionanalysis method empirically test the impact on top executives compensation andsensibility between executive compensation and corporate performance corporategovernance structure in China listed companies by empirical analysis. In this thesis, weselect board of director features and power structure as corporate governancedescription. The results show that: Due to the absence of the owner, the equity structure ofstate-owned enterprises didn’t play a management utility, private enterprise is more likely to controlthe level of executive compensation and supervision to replace the salary incentive if the largestshareholders control greater. Independent director system in listed companies did not play thegovernance effectiveness, but a tool for executives to manipulate pay, distort the pay incentives.Two grade separation of governance is not obvious utility in the state-owned enterprises, butimprove the performance sensitivity of remuneration in private enterprises. Due to the differentnature of the ultimate control person, the Board of Supervisors scale also had a different governanceeffects, members of the board of supervisors may be more delegated by the higher authorities,therefore the larger the contrary, caused the Board of Supervisors congestion and abuse of authority,with too many policies and regulations interfere with executive management and decision-making,thereby reducing performance sensitivity. The end of this chapter we make a robustness test tofurther validate the reliability of empirical results. The above findings improve the corporategovernance structure of listed companies in China and how to improve the effectiveness of the compensation contract to provide a empirical evidence, in the end we give thepolicy recommendations and research prospects.