The Research On The Relationship Between Management Incentives And Corporate Performance

Ownership and operation separate is the main characteristic of modern enterprisesystem, shareholders have the ownership of enterprise, managers have the right ofmanagement, and their interests are not consistent. Besides the problem ofasymmetric information, a series of principal-agent problem appeared. Managersincentive as the way to reduce agency costs, motivate managers to hard work, becomethe focus of people’s research.This paper argues that manager incentive include three aspects: monetarycompensation, share proportion held by management, and on-the-job consumption.From this unique perspective that the listed companies based on different propertyrights we can research the relationship between management incentive and corporateperformance. The research use the methods that combine normative research withempirical research, select manufacturing listed companies’ data in SSE A market from2008-2011as the research sample, using Excel to collation those data simply, andthen the data is grouped into different property rights, after that we can research therelationship between management incentive and enterprise business performancebased on different property rights. After the research we can see that the relationshipbetween management monetary compensation, Managerial stockholding level andcorporate performance is positively correlated, management of on-the-jobconsumption negatively related with the enterprise’s business performance, andnon-state-controlled listed companies’ agency efficiency is higher than that ofstate-owned listed companies. This research could provide some empirical evidencefor the research of listed companies’ management incentive mechanism underdifferent property rights basis. The relevance of the corporate operating performancewith management incentives is different under different property rights basis, thisconclusion should given more concern in future studies.