An Empirical Study On The Efficiency Of Executive Incentive In Listed Companies

Since the reform and opening up policy being carried out,private companies in our country developed gradually.As the main form of private enterprises,family businesses play an essential role to the development of our economy.Family business and non-family business have many differences in the efficiency of corporate governance as a result of the blood relationship and internal cohesion in the management layer.Along with the expansion in company size and the diversification in financing model,the agency problem between the principals and agents become more and more prominent.Thus,the issue of how to use different executive incentive tools(salary incentive,shareholdings,stock options)to reduce the agency costs is the most important thing to the public companies.However,by studying the existing papers,we recognize that in the family business research,the current research mostly concentrated in the family business inheritance rights,family management mode,and fewer scholars pay more attention to the different influence of dominant incentive on family firms and non-family firms.In the research of executive incentive,most studies only focus on the impact of a single dominant incentive on the enterprise,and less on the incentive synergies.Thus,in this paper,I choose the China's A-share listed private enterprises as a sample,exploring the efficiency of salary,executive stock ownership and stock option in two contexts.In this way,we could provide effective incentive policy recommendations for the family enterprises to improve the market value in practice,improve the effectiveness of executive incentive effects,and reduce agency costs.In this paper,we research the relationship between executive incentives and agency costs according to the optimal contract theory,management power theory and the theory of psychological ownership perspective.And on this basis,the author compares the three kinds of explicit incentives of monetized salary incentive,executive stock ownership and option,as well as the different effects of the combination of executive holding and remuneration on family business and non-family enterprise.The results indicate that:(1)Executive compensation incentive of private enterprises in China has a significant corporate governance effect.It can significantly reduce the first type of agency costs,and the governance effects in non-family business is more significant than the family business.(2)Executive ownership will induce agency problems,increasing agency costs,and this negative effect on non-family business impact is more significant.(3)Executive option incentive has the negative effect of corporate governance,which is easy to induce the agency problem.Compared to non-family business,executive incentive is more likely to trigger the family business agent problem.In this paper,the comparative study of family business and non-family business proposed different types of business executives explicit incentive model;Based on the study of the effectiveness of a single executive incentive,the paper puts forward the different influence of executive stock option and option incentive synergy on family firm and non-family firm,and enriches the applicable situation of executive incentive.At the same time,this study also focuses on the different effects of option incentives on family firms and non-family firms,supplementing and improving the family business incentive options in the domestic study of the lack of the status quo for theoretical research and practical exploration to provide effective recommendations.