Corporate Social Responsibility, Executive Compensation Incentive, And Corporate Financial Performance

In the recent ten years, the Corporate Social Responsibility (hereafter CSR) has alwaysbeen widely concerned by various circles of society. As an important part of the society, theenterprises not only need to take charge for the stockholders, but also for the otherstakeholders. As development of the economic, and the improvement of the society, theenterprises have gradually recognized that the CSR is the key factor of promoting the corecompetitiveness. Owing to that it will help enterprises to build good social images and obtaingood reputations.Among the research fields of the CSR, the relationship with the Corporate FinancialPerformance (hereafter CFP) has always been the research hotspot in the academic world. Atthe same time, owing to that the corporate behavior is deeply influenced by those managerswho own the operating power. So, there are a few professors having begun to explore therelationship between the CSR and the Executive Compensation Incentive (hereafter ECI),hoping to constrain the executives’ behavior by setting up scientific and reasonablecompensation incentive system. Through this system, it can make the executives build correctsense of CSR which is good for the long-term development of enterprises. What’s more, thiscan also be utilized to reduce the principal-agent cost. The empirical test results are as follows:First, in our country, there is a negative relationship between CSR and CFP, and basicsalary, stock option and ownership may indicate a positive influence;Second, when using the ROA as the evaluating index, it shows a positive relationshipbetween the EDI and the CFP, and undertaking CSR can strengthen this relation, whereaswhen using the TobinQ, the result is negative, what’s more, the influence of fulfilling CSRdoes not exist.