The Relationship On Small Board Listed Company Executive Compensation And Enterprise Value

Listed companies in small and medium-sized boards account for more than90%ofall modern enterprises in China. Compared with main board listed companies, listedcompanies in small and medium-sized boards have many disadvantages, which arecomplex ownership structure, apparent family management, and out-dated technologyfunding, and developing specialization collaboration. However, could the conclusion ofexecutive pay system at home and abroad be applied to executive pay system of listedcompanies in small and medium-sized boards? In the existing literature, there are not muchresearch on the relationship on small board listed company executive compensation andcorporate performance, and most literature focused on the relationship on one factor ofexecutive compensation of listed companies and corporate performance, with no researchanalyzing correlation between three factors of executive compensation (that is the level,gap and structure of executive compensation) and enterprise value.Through the method of combining normative research and empirical research, thispaper choose annual reports of276small plates listed companies that listed before2009in2011, based on considering external factors, such as the size of company, industrial sectorsand distribution, examining the correlation between executive compensation of small plateslisted companies and enterprise value, analyzing executive compensation incentives and theactual effect of incentives. Then the paper gets the following conclusions by means ofempirical analysis:Except executive compensation structure of small plates board listed companiesstanding for the number of shares held, the level and the gap of compensation havesignificant positive correlation with enterprise value, in other words, it is mainly themonetary compensation that play a role in executive compensation incentives of smallplates listed companies, and equity incentives don’t come into play. Meanwhile, the sizes ofcompany and distribution have positive effects on executive compensation system of smallplates listed companies. Finally, combined with the actual situation of small plates listedcompanies, the paper gives some suggestions on the structure and the gap of executive compensation, oversight mechanism of compensation, and corporate governance structure,so as to provide references to executive compensation incentives to listed companies insmall and medium-sized boards.