The Research Of The Relationship Between Executives’ Excitation And Corporate Performance-Based On The Ownership Structure

Due to the rise of the principal-agent theory, the theory of corporate governancestructure has gradually been paid more attention, especially after20years ofdevelopment of China’s securities market, company corporate governance structurebecome a more important issue, among which the relationship between executives’excitation and corporate performance has gradually been a concern of researchers andthe management of the Company. In addition, the impact of the international financialcrisis in2008, from2009to2011, a lot of the performance of listed companies hasimproved, the economy began a sustained recovery, but the impact of the financialcrisis on China’s economy continues to improve. In this kind of environment, howbusiness improves the executive monetary compensation and long-term equityincentive to make the most use of executive resources is the key to success in businesscompetition. Therefore, it is necessary to study the relationship between executives’excitation and corporate performance.Typically, whether executive executives are valid is a measure of corporateperformance. In research field domestic and foreign scholars have completed a seriesof studies about the relationship of executive incentives and corporate performance.The general view is that, to motivate the company’s management can effectivelyimprove the performance of the company, but in the other studies are not consistent.Obviously, the incentive effects of the executives also subject to a number of factors.Many previous studies focused on corporate governance structure, executive salarystructure, while ignoring the company’s own characteristic effect on incentives. Thispaper argued that companies of different ownership structure had significantdifferences, so the article reveals the relationship between executive pay incentivesand company performance based on the group of the companies according to thecompany’s ownership structure. This paper focuses on three issues:(1) Executives monetary remuneration andequity incentive levels whether positively correlated with the performance of thecompany;(2) Whether the relationship between the remuneration of executivecurrency, equity incentive and corporate performance is differences based on thegroup of the companies according to the company’s different shareholding structure;(3)Equity incentive whether impact on company executives monetary remuneration andperformance;Executive monetary compensation whether impact on executive equityincentive and company performance.The paper found that:(1) The level of incentive continued to increase in the pastfew years, but was still at low level compared to developed markets. There is obviousdisconnection between change of remuneration and performance;(2) Executiveremuneration incentives and equity incentives are positively correlated with theperformance;(3) Regardless of the company’s state-owned shares ratio, executivesmonetary remuneration and company performance significantly with a positivecorrelation; higher the proportion of state-owned shares, equity incentives andcompany performance of the relevance of the more weak;(4) The higher theproportion of legal person shares of listed companies, executives monetaryremuneration, the weaker the correlation between the equity incentive and corporateperformance.(5) Regardless of the company’s equity concentration, executivesmonetary remuneration and company performance significantly positive correlation,the degree of concentration of ownership that a listed company does not affect theexecutives monetary remuneration and company performance; the options relativeconcentration of the listed companies, equity incentive related to corporateperformance, the stronger.(6) The absolute concentration of equity incentivecompanies, monetary compensation and executive performance weak correlation; andrelatively concentrated in the equity incentive and dispersed in the company, equityincentive and company performance at the0.01level is significantly related to thelisting Corporation, the implementation of equity incentive degree is high, monetary compensation and firm performance relationship between executives and more weak.As a top executive monetary compensation grouping regression found, executivemonetary compensation and executive compensation monetary grouping small, equityincentive and corporate performance under0.1of the significance levels significantlypositive correlation; group executive monetary compensation is moderate, the equityincentive and corporate performance under0.01of the significance levelssignificantly positive correlation.This paper argues that:(1) Due to the generally low level of China’s listedcompanies management incentive, it is to continue to improve executives monetaryremuneration and equity incentive levels, while the use of monetary incentives andlong-term equity incentive pay to motivate executives layer can further motivate highThe tubes staff work diligently to achieve the continuous improvement of theperformance of listed companies. Different shareholding structure (2) Executivesdifferences monetary remuneration, equity incentive and corporate performancerelationship, the shareholding structure of the impact on the company’s businessobjectives and investment behavior, and influence the company’s decision-makingmechanisms, investment behavior, incentives and distribution behavior, therebyaffecting corporate performance and prospects for the development of the capitalmarket and, therefore, should adjust the shareholding structure of the company inorder to promote the growth of the performance of the company.(3) Complementaryincentive to enhance the level must continue to improve corporate governancemechanisms to enhance information disclosure, enhance market effectiveness,building manager market, and improve laws and bad environment, and continue tostrengthen the incentives linked to the company’s long-term operating results oriented.