Research On The Relationship Between Executive Compensation And Performance Of State-owned Enterprise

Salary incentive is accompanied by the development and prosperity of social economy, linking interests among the entire company and individuals and forming a long-term articulation, which helps all of the company owners control the details of management levels in each operating activities. As an important project of modern corporate governance and beneficial method on company’s long-term promotions with more and more attentions, salary intensive is important for the completion of company goals and improvements on the economic benefits. Now, our country’s economic recovery is in prosperity and faces a choice in the new period of transition, the relationship between salary incentive and the corporate performance will be further discussed. In particular, for state-owned enterprise, due to its deep political background with the executive relationship network, it makes the relationship between the corporate performance and the income of executive even more complex. In fact, a small number of state-owned enterprises have problems and shortage on compensation incentive system, this will damage the interests of stakeholders such as creditors and investors, capital markets efficient allocation of resources. It is visible to note how to improve and perfect the income of executive with special background in those state-owned enterprises becomes into an urgent problem to be solved.In view of this, based on the special background of state-owned enterprises in China, with compensation incentive theory and aiming at the shortcomings of the existing research, this paper takes the sample data of Shanghai and Shenzhen Stock Markets listed companies under the state control as research samples, and get the filtered298financial data and report, focused on the following three questions:(1) the evaluation of state-owned enterprises performance;(2) the relationship between the executive compensation and state-owned enterprises performance;(3) the influence of state-owned enterprises caused by executive compensation, executive age. In the research structure, this article first states research of executive compensation and enterprises performance, and related theoretical basis for a summary; Secondly, using the method of factor analysis, it builds the state-owned enterprises performance evaluation, in order to calculate comprehensive state-owned enterprises performance score; next, it examines the relationship between state-owned enterprises executive compensation and performance, at the same time, introducing executive age, to test the interaction and influence of executive compensation; Finally, it puts forward the suggestions, to improve the level of state-owned enterprises theory research and practice of management, to improve the state-owned enterprises executive compensation incentive mechanism, to avoid the loss of state-owned enterprises assets, to establish suitable management system of state-owned enterprises compensation incentive, and then to improve the governance of listed enterprises.In this paper, the main research conclusions are as follows:firstly, the results show that there is a strong correlation relationship between state-owned enterprises executive compensation and performance as single parts; secondly, there is a strong correlation relationship between state-owned enterprises executive compensation and performance as a composite scores; thirdly, considering the executive age, the older the executive is, the better the state-owned enterprises performance can be.Finally, the paper argues that, it is worth to enhance the state-owned enterprises average compensation properly, to improve the evaluation of the state-owned enterprises compensation, to strengthen the supervision of young executives in state-owned enterprises, and to improve the disclosure transparency.