The Analysis Of The Correlation Between Executive Compensation And Corporate Performance In GEM

The gem is the emerging sector in China in recent years, and only spend 6 years to have played a significant role in the development of our private economy. For now, because of the gem in China starts late, the gem listed companies in our country’s research is rare, compared to the huge number research on mainboard, and the research methods and conclusions about the mainboard and do not necessarily match the gem. With the rapid economic development of our country in recent year, the scale of listed company has expanded and the overall level of executive pay is increased year by year, but different company presented the different levels of profit and loss, so the research of the correlation between executive compensation and corporate performance is necessary.This article gives a detail explanations to the issue, based on the theoretical analysis and the related concept, putting forward the assumption of validation by empirical analysis. According to the the introduction of relevant theories, such as the principal-agent theory, human capital theory and incentive theory, the paper sets forth the background and the influence factors of executive pay. This paper use the cross-section data which is selected from the 2013 annual report data of gem listed companies, setting executive pay as dependent variable, the enterprise performance as the independent variable and control variable relating other factors, building the linear regression model, analyzing the results.In combination with the results of theoretical analysis and empirical analysis, this paper gives the following conclusions:Corporate performance and financial director’s compensation have positive correlatio.Corporate performance and the compensation of the top three executives have negative correlation.Corporate performance has a positive correlation with the company size.There is no correlation between corporate performance and risk.Based on the results of the empirical analysis and gem listed company’s actual situation, we can put forward the following Suggestions:Dynamically adjust the senior managers’pay. Consider the gap between different regions and different industries. Establish scientific salary incentive mechanism, paying attention to short-term incentive and long-term incentive combination.Widen differences in executive income, creating a good competitive environment. Strengthen the supervision of executive compensation and increase compensation information transparency.