Study On The Influence Of Executive Incentives On Enterprise Performance

For a long time, how to effectively motivate management has always been an important concern in the theory and practice circle. Especially after the.emergence of many joint-stock companies, the principal-agent problem comes from the separation of ownership and management and the executive incentive problem has been paid attention. Our country’s executive incentive practice starts late, but in recent years, with the continuous development of capital markets and corporate governance, incentive mode has great development and executive incentive level also has a growing trend. In 2006, the China Securities Regulatory Commission issued " listed companies’management measures of equity incentive (Trial)", shows that our executive incentive way is diversifying and it paves the way for China’s listed Companies to carry out a wide range of equity incentive.The domestic part of the study on the relationship between managerial ownership incentive, compensation incentive and corporate performance has made some achievements; however because the data selection, sample order or the use of empirical approaches may have some defects, it still has the value of further study.In view of this, this paper gets the listed companies’ financial data from CSMAR, the following three problems are studied by using descriptive statistics, multiple regression analysis and other methods:(1) whether there is positive linear correlation between the management shareholding ratio and corporate performance; (2) whether management shareholding ratio has two square curve relationship with corporate performance; (3) whether the compensation incentive level of the management is positively related with corporate performance.In this paper, through the study we found that:(1) the proportion of management ownership has a significant positive linear relationship with the corporate performance; (2) there is no significant quadratic correlation between shareholding ratio and corporate performance; (3)there is positive correlation between the level of compensation incentive and corporate performance.This paper’s study found that improving the level of the executive incentive can make management work more diligently, as to realize the continuous improvement of the listed companies’ performance. Of course, we must continue to realize the synchronous development of incentive mechanism and constraint mechanism, and further improve relevant laws and regulations.