Research On The Effect Of The Private Equity Investment On Managerial Remunerates-performance Sensitivity On GEM

Private equity investment is the main financing channel for entrepreneurialenterprises that plays an increasingly important role in China’s capital market. Privateequity fund has a major impact on GEM Corporate Governance, by designing effectivemeasures and agreements,encouraging managers enhance the sensitivity of results toensure that the behavior of managers is consistent with the interests of shareholders.This paper explores how to improve the participation of the private equitybusiness GEM corporate governance from changes of sensitivity to the seniormanometer’s view. Through simmering the existing literature and theoretical analysis,put forward PE ratio of participation in companies listed on GEM PE with higher payperformance sensitivity. Meanwhile, the proportion and the background of privateequity holdings, joint investments have different effects on the company’s performancesensitivity investments. In the empirical research, we choose2010-2012317GEMs forthe object of study, then did regression analysis by OLS method to test the abovehypotheses. The conclusions is as following: there is higher salaries performancesensitivity with the participation of the private equity fund, the foreign private equityfunds and state-owned background.And then, there is positive correlation between theproportion of private equity funds,the number of joint investment and Pay-performancesensitivity.Finally, the paper proposes some advice to the promotion of private equityfunds, first, regulate private equity mode of operation; second, improve the governancestructure of private equity firms.