A Study On Relationship Between Zhejiang Area Listed Company Executives Incentive And Corporate Performance

The domestic and international research about relationship between executivesincentive and enterprise performance has been quite fruitful, but it is still a concernedand dedicated topic in the academic and practice areas. Growing with the trend ofdevelopment and market demand, many scholars in china have worked in the samerelationship research areas within listed companies and got some results. However,there are still lots of space left for research in some specific location. Especially, theresearch of relationship between executives incentive of listed companies in Zhejiangprovince and enterprise performance. After the global financial crisis in 2008,Zhejiang province has entered the post-crisis era and the twelfth five-year guidelineperiod. When faces with a complex external environment, how to motivate executivesof listed companies to seize the opportunity or to avoid risk for improvingperformance has a strong level of importance in practice and theory.On basis of the analysis of the macro-environment, the research is raised up, then, itpoints out the research methods, logical thinking routine and clarifies the purpose.After reviewing the relevant theory and documents, collecting dates of listedcompanies in Zhejiang province from annual reports during three years, raising up thehypothesis about existing positive correlation between executives incentive andenterprise performance in Zhejiang listed company. Additionally, in this paper, theexecutive incentive is divided into executives annual salary and executivesstockholding, and the enterprise has four dimensions including profitability, thequality of the assets, debt risks and business growth, then, pointing out hypothesis ofmore detailed relationship. Specially, noting that the family firm has a positive effecton the relationship between executives incentive and enterprise performance. Thenconfirming that executives of listed companies in Zhejiang province salary incentiveshas significant positive correlation with enterprise performance, but the relationship isnot very strong. And confirming that Zhejiang area listed company executivesshareholding incentive and enterprise performance does not exist between significantcorrelation. This paper also proves that executives shareholding incentive andenterprise performance do not exist interval effect relationship. Finally, correlationbetween executives annual salary incentives and corporate performance in family firms is more strong than the correlation in non-family firms.On basis of the analysis of the status of listed companies of Zhejiang province andexecutive incentive and combining with the results of relevant empirical analysis, theauthor explains why those results happened. Then, pointing out some rationalproposals according to the above results of empirical analysis and hope thatexecutives incentive and restraint will be strengthen and management will beimproved. Finally the author proposes some inadequacies of this article, and hopes forfurther study in the future. Especially, the research about family organization form hasan effect on positive correlation between salary incentive and enterprise performanceand research about non-correlation between executives shareholding incentive andenterprise performance.