Corporate Social Responsibility, Executive Compensation And Financial Performance

In recent years, safety incidents and environmental events occur frequently. The government and the public pay more attention to the implementation status of corporate social responsibility and performance of the listed company social responsibility has become a research hotspot. The listed company has been caught sky-high compensation, the executive compensation is as sensitive as social responsibility. So what effects it have on financial performance to fulfill the social responsibility and motivate senior executives, and how? This paper tries to answer to this question and investigates the influence social responsibility and executive compensation have on financial performance from the perspective of the life cycle.Based on Agency theory, Stakeholder theory and contract theory, we build a panel data model between social responsibility, executive compensation and financial performance. This paper use F test and Hausman test to judge panel data model and the result is random effects model. We use feasible GLS estimation to estimate the model. Then, this paper testes the social responsibility model and executive compensation model and explore the mechanism of its action. The results show that the corporate social responsibility performance and financial performance appear negative phase correlation; executive compensation level is positively related to the financial performance; The company with higher stock concentration and larger size prefer to have a good financial performance. State-owned company and the company with high debt level prefer to have a poor financial performance. After finished the whole sample of empirical test, the paper mainly investigates the company which stands on germination and maturity. The results show that:corporate social responsibility performance is negatively related to the financial performance in the growth period; the performance and financial performance is related to corporate social responsibility in the mature period; Executive compensation level and financial performance are related.Finally, combined with the results of the empirically research and given the shortcomings of capital market operation in China, the paper makes some suggestions in improving social responsibility information disclosure, promoting social responsibility investment among investors and improving the executive compensation incentive mechanism.