The Impact Of Executive Compensation Structure On Corporate Performance

Executives are essential to the corporate management and development as the corporate core. Chinese real economy has immense downward momentum, as well as corporate performance. At the same time, such as unusually high compensation, some executives lean on their position for luxury consumption news appear in the public, so the executives of listed corporate get much social attention. Therefore Academics and practitioners begin to think about how to build effective incentive to achieve good corporate performance, the relevant government department also pay attention to the executive regulatory of state-owned listed corporate. Based on this, the paper study the executives’ compensation structure of listed corporate, then study the non-state-owned listed corporate and listed companies respectively.The paper documents as follow:(1) organize and review the literature on the relationship between executive compensation, the equity incentive, perquisite consumption with corporate performance. (2) Through the derivation of the mathematical model and numerical simulation, we infer and verify the revised options formula and PPS formula. (3) Based on principal-agent theory, incentive theory, we use data of 585 listed firms in period 2009-2013, through descriptive statistical analysis, correlation analysis and econometric model regression, then study the impact of monetary compensation, incentive compensation, perquisite consumption, incentive intensity on the corporate performance of the whole corporate, stats-owned listed corporate and non-state-owned listed corporate respectively. Besides, we also study the integrated effect of monetary compensation, incentive compensation and perquisite consumption on the corporate preferment.The empirical results show that the relationship between monetary compensation, incentive compensation and perquisite consumption with the corporate performance irrelevant, positive correlation, and negative correlation respectively in the whole corporate and non-state-owned listed corporate. As to the whole corporate and non-state-owned listed corporate the relationship are irrelevant, positive correlation and irrelevant respectively. Incentive compensation and perquisite consumption has substitution effect, and the inverted U-shaped relationship between incentive intensity and corporate performance regression results claims that the proportion of incentive compensation is not always better. In design of executives compensation contact, shareholders should choose the best incentive intensity, which will make incentive compensation effect on the corporate performance maximized; besides, relevant government department should regulate the disclosure of financial information about executives’perquisite consumption, and corporate should establish an effective system of rules and standards on perquisite consumption.