Study On The Relationship Between The Executives Pay, Shareholding And Corporate Performance

Since the theory of separation of ownership and control has been proposed,corporate governance theory developed rapidly, forming a principal-agent theory, incomplete contract theory, X-efficiency theory and other theories. These theories starting from how to improve firm performance from different angles to explore the relationship between ownership structure and corporate performance.Chinese scholar's researches on how to improve corporate performance of the main board listed company are more fully, but the research study of GEM is relatively scarce.Just now, the Employee Stock Ownership Plans being widely implemented in listed companies including many GEM companies.What kind of pay system with managerial ownership system can improve business performance is the urgent problems in the study of GEM.In this context,this paper studied the relationship among executive compensation, shareholding and corporate performance of GEM listed companies.Firstly, domestic and foreign research literature on the relationship among executive compensation,shareholding and corporate performance was reviewed and summarized; Then analyzed the current situation of the GEM listed companies, including company size,management compensation, ownership and corporate performance. Finally,on the basis of studied the theoretical relationship among executive compensation, shareholding and corporate performance,an empirical analysis were studied on GEM listed companies between executive compensation,the shareholding ratio and firm performance by using the samples of fifty one companies in 2011 to 2014 and the panel fixed effect model. Come to the conclusion that the management compensation of the GEM listed companies have an positive correlation with corporate performance,and increase of managerial ownership does not improve corporate performance. Further study shows that the management revenue comes mainly from the sale of their shares and the long-term high value of the GEM market are the significant reasons why increase of managerial ownership does not improve corporate performance,and management high stake does not affect the improvement the executivecompensation.After got the conclusions of the relationship among executive compensation, the shareholding ratio and firm performance, five suggestions on how to improve the GEM listed company's performance were put forward. By rising the management monetary remuneration,improving the GEM listed company ownership structure, establishing long-term mechanism of managerial ownership system and so on.