An Empirical Study On The Effect Of Corporate Governance On The Sensitivity Of Executive Compensation And Salary Performance

Executive incentive issue has been a hot topic of corporate governance, the senior managers are responsible for the daily business management and major strategies, that is to say, Executives is directly related to business performance is good or bad. In an increasingly competitive situation, Business executives how to establish an effective incentive pay system and how to solve the principal-agent problem has become a concern in recent years more research questions. Executive compensation incentive as one kind of the senior incentive. If done well can help ease the problems caused due to shareholders and proxy manager layer separation of ownership and management, so that the interests of managers and shareholders tend to be more consistent, thereby reducing agency costs. The purpose of this study is to verify the impact of corporate governance structure of executive pay performance sensitivity through empirical analysis.In this paper, the theory of corporate governance, management incentive theory and principal-agent theory theoretical framework, combined with the background of the current economic reform in China, selected 2010 2012 2919 samples of A-share listed company’s board, in accordance with the overall sample, a sample of state-owned enterprises non-state-owned enterprises samples, industry, year, region for sample descriptive statistics. Describe the current status of China’s A-share listed company’s board of corporate governance and executive compensation structure. In the empirical part of this study, the establishment of three models, respectively correlation between executive pay and performance model, the sensitive one and two posts of executive pay and pay performance sensitivity models and ownership concentration and executive pay and performance pay model. From two jobs- one, two aspects of ownership concentration, the system analyzes the impact of the corporate governance structure of executive compensation and performance sensitivity of executive pay.Through empirical study found: 1, company performance and executive pay were positively correlated. 2, two grade-one negative correlation with executive compensation. 3, ownership concentration was negatively correlated with executive compensation. 4, grades one and two executive pay performance sensitivity was negatively correlated. 5, ownership concentration and negatively correlated with executive pay performance sensitivity.Executive compensation and corporate governance status and empirical results combined with our A-share listed company board on how to build an effective corporate governance structure to motivate executives made the following recommendations: 1, pay incentives to improve listed companies in China 2, the elimination of the Company in one of the two jobs, three, optimizing ownership structure of listed companies.