Research On The Correlation Between Executive Compensation And Corporate Social Responsibility Performance Of Listing Corporation

In the period of Chinese economic and social transformation, the contradiction between enterprise interest and social interest will be intensified as well as enterprise efficiency and social equity. People's sense of social responsibility has gradually improved. Current researches have clarified the importance of corporate social responsibility performance to the long-term survival and development of enterprises from competitive advantage and strategic means. In this background situation, business owners have enough motivation to improve CSP. However, due to the separation of ownership and management rights, the owners must depend on the executives in order to improve CSP. As rational person executives do not seem to initiative to improve CSP without corresponding incentives. And executive compensation has been continuing focus at home and abroad. Based on this background, the paper studies how to enhance corporate social responsibility performance by improving executive pay incentives.Existing literature is mostly focused on the relationship between executive compensation and CFP. The traditional financial performance as the only standard of executive performance, can easily lead to distortion of executive excitation. While it can meet the demands of various stakeholders and help promote long-term development of the enterprise through CSP evaluation. This makes a new entry point of corporate governance research to discuss the rationality of executive pay from the perspective of CSP.The literature to discuss enterprise executive compensation from the social responsibility performance is less and lack of empirical research. This paper introduced CSP into the contracting process of executive compensation based on the principal-agent theory, stakeholder theory, incentive theory, interest convergence theory and dig in self-controlled theory, etc. In addition it deeply analyzed the different incentive mode of compensation structures on corporate social responsibility performance. Samples were chose from data of Chinese A-share listed companies from 2010 to 2014. Finally we get 6285 samples to test the model hypothesis relationship by regression analysis. The study found: executive currency compensation and executive shareholding have played a positive role in CSP. Among them executives shareholding of the social responsibility performance sensitivity is better than that of executive compensation. On this basis we carried out in-depth study between executive shareholding and CSP through the integration of interest convergence theory and dig in self-controlled theory. Found that there are inverted u-shaped relationship and most of the listed companies in our country are in the rising phase of the inverted u-shaped curve. It is also the innovation of this article. Finally we put forward: To promote CSP and maintain the interests of all stakeholders, not only need to improve the assessment of executive compensation mechanism,introduce CSP into executive compensation contract contracting process; but also realize the coordination between short-term currency compensation incentive and long-term equity incentives, increase the proportion of long-term incentive compensation, establish a diversified compensation incentive contract; While in the process of implementing the management equity incentive, corporation should consider carefully to avoid excessive incentives. In order to encourage executives to enhance CSP, corporation can establish a long-term mechanism of salary incentive for manageres.