Executive Payment,Corporate Governance, And Corporate Performance

With the transparency of listed companies on executive pay raising, the public listed company executive compensation caused great public concern. In this context, research and exploration of executive compensation factors and their impact are important. By using 1236 to 2107 companies, listed in Shanghai or Shenzhen from 2005 to 2011, as sample, this paper discusses the relationship between executive compensation, corporate governance and the performance of the company. This paper refers to the modeling method of Core(1999) in the empirical analysis,I regress the corporate governance factors with executive payment to get the effects of corporate governance factors to executive payment, and then I use the estimated coefficients of corporate governance factors get the excess payment caused by the corporate governance factors, lastly, I regress the estimated excess payment with corporate performance to get the effect of excess payment to corporate performance.First of all, this paper discusses the relationship between corporate governance and executive compensation from three aspects of corporate governance( board governance, ownership structure and Supervisory Board governance), and the result shows that: from the aspect of the board governance, board size has no significant effect on executive pay, while larger percentage of independent directors on board and has significant positive impact on executive pay, but more shareholding directors on board executives are more likely to get lower salaries; from the aspect of ownership structure, higher ownership concentration and state holding stock both have a significant negative impact on executive compensation; from the aspect of Supervisory Board governance, the size of the Supervisory Board fund no significant effect on executive pay, while more shareholding supervisors on board has a significant negative effect on executive pay. Secondly, this paper discusses the relationship between corporate governance caused executive compensation and company performance. The result shows that: the relationship between corporate governance executive compensation and company performance turn out to be significant negative.