Empirical Analysis About Executive Lncentives’ Impact On The Company Performance In Listed Companies Of China

The management incentives become the focus of world attention after the U.S. Enron, WorldCom and other series of corporate financial scandals having been exposed.2009, Obama had an announcement of "executives salary limit order" in the financial industry. In China, early incentive is insufficient, and "the59-year-old phenomenon" is general. Later incentives are excess. The objective of the study is to adapt in order to build the physical environment and the company’s management incentive. There is a principal-agent problem between the owners and management of the company, in order to weaken two different main goal conflict, the owner of company should provide competitive incentive compensation. Management in the effective corporate incentive mechanism will put his personal goals close to the company’s goals. Management incentive pay, it will give the company business performance brought a positive impact on it? Incentive selected will be varying degrees of impact on the performance of listed companies of the different nature of equity? This article will be explored.The main idea of this paper is as follows, the article is divided into five main sections:In the first part of the article, it introduces the main research background, significance of the introductory articles, research methods and the research framework of the article. The second part is the literature review, introduces studies at home and abroad up to now, this paper research ideas specifies research directions. The third part is the management incentive and corporate performance theory. This section first overviews of the management incentive and explore the impact of the company’s operating performance and management incentive mechanism analysis. Using the agency theory, incentive theory and the theory of property rights and other basic theory to explain the relationship between management incentive and corporate performance, and then propose theoretical assumptions. This is the theoretical basis of this study and the logical starting point. The fourth part is the empirical research design, including sample and data sources, variable definitions, model design, factor analysis, descriptive statistics and multivariate regression analysis. The fifth part is the conclusions and recommendations of this article, in this part, the writer will have an analysis of the results of empirical research, concludes with recommendations and point out the limitations and contributions of this article.This paper selects A shares issued in the China’s Shanghai and Shenzhen stock exchanges between2009and2011as the study samples. Using currency management remuneration, percentage of stock holdings and non-pecuniary compensation as explanatory variables of the empirical research, and using factor analysis by the drop of Viti Levu to take on the common factor of financial indicators integrated value as a measure of company performance, supplemented by company size, financial leverage, ownership concentration, corporate nature as the control variables.There are three main innovations in this paper:First, rather than the more mature western capitalist market, China has a special national conditions, with different nature of property rights, the management of the holding of listed companies in China has different incentives affect on corporate performance. This article will have an in-depth analysis. Second, in order to have knowledge of two types of listed companies’management incentive impacting on the company performance, the writer will take advantage of the multi-level empirical analysis methods to verify the results. Third, to prevent one-sided, we use factor analysis method to get a composite indicator to measure the company’s operating performance. In addition, the writer uses non-pecuniary compensation on behalf of the implicit management incentives, in this way, the result will be more credible.