The Empirical Study On The Impact Of Comprehensive Performance On Senior Executives’Payments Of Domestic Listed Financial Company

After the financial crisis in2008, the payment scandal of the financial big shots happened so frequently on Wall Street that it had drew the attention of the whole society, and the public now feel skeptic about the effectiveness of the management payment mechanism in the western developed country. Along with domestic financial companies joined in the SHANGHAI and SHENZHEN stock markets and the network developed rapidly, the payment information of the bank senior executive became more and more transparent to the public, and we saw the exposure of the high payment of those senior executive. This problem has drawn the concern of the government and the doubt of the public. In2009, the MOF and Banking Regulatory Commission issued a series of policy to regulate the payment of the senior executives. This article would research the high payment of the senior executives of the public financial company from both theory and empirical analysis, and would show whether the comprehensive operating performance is considered when the excessive compensation of the senior executives is decided.This article uses cross section regression model on the statistics of30domestic public financial companies between2001and2012, and explores the endogeneity of executive pay and performance. It is found that the excessive senior executives’ compensation shows positive relationship with the comprehensive operating performance, and also shows positive relationship with the total assets of the financial company. From the aspect of corporate governance, the internal governance does not play an effective role in domestic financial industries. During the empirical study, domestic financial industries are found endogenous between corporation comprehensive operating performance and excessive executive compensation, but the conclusion would not be changed fundamentally when considering the endogeneity.The main innovation of this article lies in:firstly, this paper used entropy method to construct a comprehensive performance index from profit ability, growth ability, solvency and asset quality, and used this index to study the operating performance on executive payment; secondly, system virtual variables is set to explore whether the salary limitation of year2009would affect the relationship between domestic financial enterprises comprehensive operating performance and excessive executive compensation; finally, this article tested the endogeneity of excessive executive pay and comprehensive performance.