Correlation Between Listed Companies Executive Compensation And Corporate Performance

Executive compensation system as an important incentive mechanism for manager, has been a hot and key issues of corporate governance research. In recent years, the "astronomical executives" phenomenon has aroused wide concern in society, has spark-ed heated debate continues. China’s listed companies executive compensation increase-ngly expanding year by year, but the performance of the company’s profit or lose there, the relationship between executive pay and company performance is not obvious. it se-ems that there are signs of decoupling. Numerous studies suggest that the lack of corr-elation between this stage of China’s listed companies executive compensation and co-rporate performance. However, we need to think deeply:whether to draw this concl-usion because of performance indicators to select different differences? Enterprises of different ownership of executive pay and company performance correlation between whether the difference? Explore these issues for a reasonable and effective executives incentives and measures to promote the improved operating performance of listed companies is importantTaking into account the different characteristics of the ownership of state-owned enterprises and private enterprises, the paper will be selected sample is divided into state-owned listed companies and private listed companies, these two categories of corporate executive pay and company performance correlation of empirical research; while taking into account Company’s financial performance and market performance has a significant impact on the results, the paper into the performance of the company’s financial results and market performance of two variables. respectively. these two variables as explanatory variables to study the issue be studied.Based on the study, the first on executive pay and company performance correlation between theoretical basis for standardized analysis, hypothesis to be tested. on this bas-is, to our Shanghai A-share listed companies in the manufacturing sector as the resear-ch sample, selected in2010-2012sample company data in three years, on the correl- ation between executive pay and company performance an empirical study. The study found:Overall, China’s manufacturing industry listed company executive compensation and the financial performance of the company has a positive correlation, but the correl-ation is not significant, there was a significant positive correlation with the company’s market performance, market performance than the financial results significantly corr-elated this shows that our overall manufacturing listed companies executive compen-sation is still active and effective incentive mechanism. Further, a comparative study of the sample companies owned enterprises and private enterprises, research results show that the state-owned listed companies in China’s manufacturing industry, executive compensation and corporate financial performance and market performance correlations were not significant; while in private listed companies in executive compensation with the market performance of the company has a significant positive correlation with the company’s financial performance correlation is not significant.