Empirical Study Of The Effect Of Executive Incentive And Ownership Centralization On The Listed Companies’ Performance

The listed companies have developed well since the 1990 s. They become the important parts of the capital market in our country gradually. On the one hand, they raise money from the public in order to expand their capital, on the other hand, they widen the investment channels for people and make the market energetic. The company performance has become the common concerned issues of the owners, the managers and the share holders. How the owners and the managers of the listed companies can improve the company performance in order to get the maximum benefits? Whether are the executive incentive and the ownership centralization useful to the listed company performance? All the questions are worth of serious consideration.On the basis of the previous relevant theoretical and empirical research, we build a multiple linear regression model and adopt empirical research in order to find the relationship between the company performance and the executive compensation, managerial stockholding level and the ownership centralization of the 826’s listed companies in the A’s stock markets of Shanghai and Shenzhen and we study the 48’s companies which implement the equity incentive in the A’s stock markets of Shanghai and Shenzhen. As a result, we find it has a positive correlation between the company performance and the executive compensation and the equity incentive. The relationship between the company performance and the ownership centralization is relevant in some extent. But it doesn’t have a positive correlation between the company performance and the level of managerial share ownership.Empirical analysis shows that the executive compensation incentive has a positive impact on the company performance. Setting up the mechanism of compensation and performance and determining the proportion of executive fixed salary and bonus rationally help improve the executive’s positivity and the company performance. The equity incentive improves the company performance. The equity incentive can get the interests together between the shareholders and the managers and reduce the principal-agent problem effectively. Establishing the ownership centralization appropriately and helping the owners form the advantages of effective supervision can make the managers work hard and improve the company performance.