Enterprise Management Structure And Business Performance Of Correlation Studies

As the core decision-making, senior management, which are the main part and development center of the corporation, are charged with a series of major deicsions, including strategic management. The problem of the excitation of the senior management in the corporation becomes one of the difficulties and central issues since the proprietary and franchise are separated. From the perspective of theory of the firm of agent point, the interests of the management and the owner are not completely the same. The core of the modern corporate governance is that we should correctly handle the relationship of the right balance and the distribution of benefits between the principals and agents. The aim is to fully incite the ethusiasm of the agents and maximize the value of the corporation in the context of unity of purpose and interest convergence of principals and agents. Salary is the common practice in most corporations. Thus, choosing appropriate samples and then analysing the relationship between the current performances of Chinese listed companies and the salary of senior management and finally finding the shortcomings will help to formulate and improve the salary system and then promote the effectiveness of inciting the senior management, developing the performance of Chinese listed companies and promoting the economic development.For a long time Chinese liste companies adopt the form of salary and bonuses or the annual salary system, which is a short-term incentive, has led to a serious shortage of long-term incentive of the senior management inside the Chinese listed companies. At the same time we have a late start in the area of equity incentive because of the promotion reform at every level of economic, especially the enterprise ownership reform. During the exporation and practice for the equity incentive, lots of listed companies in China formulated employee option incentive plan before and after the year 2000. However, problems of stock source and equity division have not been solved because of the legal policy and the market rules, which leads to the results that the equity incentive plan or the alternative approach cannot be implemented or no good results after the implement.The development of the Company Law, especially the promulgation of Listed Companies Equity Incentives (trial) of the commission in the early 2006, provide an effective legal basis for the implement of equity incentive plan. The new Company Law has a breakthrough in the aspect of capital system, repurchasing shares and the transfer of shares during the tenure of the senior management, which remove the legal barriers of the equity incentive implement of the listed companies, and solve the problem of share source, management equity access and the cashing of equity incentive interests in the operation of the equity incentive.In order to further regulate the frequent misconduct of equity incentive of the listed companies, SFC promulgates the No.1 and No.2 memorandum of the matter on May 6th,2008. These two memorandums expose the practical problems since the implement of equity incentive system, which brings a huge development for the system construction.But we should also realize that the problems of incentive of the senior management of the listed companies have not been well settled. As the multi-level principal-agent problem of the corporate property rights become obvious, the excellent management are attached importance in the manager market. The further increase of the business risks make the incentive problems for the senior management more obvious.The separation of proprietary and franchise and the asymmetry of information produce a sensitive relationship between the performance and senior management pay. This article selects 306 listed companies as the samples, and investigates the senior management incentive status using the statistical methods, and then tests the relationship between the senoir management salary structure and the enterprise performance using linear regression model with hypothesis testing, thus, probes the effective of senior management salary incentive. The result shows that the senior management holding the shares integrates the interests of the executives and the long-term performance of the enterprise, which is long-term salary incentive, and considers the positve correlation between the salary of senior management of listed companies who hold shares, which demonstrates that a single fixed annual salary in cash is not reasonable, and the effective of salary incentive is not obvious, but it will have a positive effect on the performance improvement by reforming the equity division to complete the governance structure and makes the incentive produce a positive effect. So the comprehensive incentive effect, which takes the share-holding into consideration, is better than the single salary currency or the equity incentive. That is to combine the fixed and risk revenue. In this article, effective combination of annual salary system and stock options are proposed and studied to reform the salary system of senior management of enterprises.