Growth Of Listed Companies,relative Performance Evaluation And Senior Executive Compensation

In today's knowledge economy era,senior executives are very important for the companies and have gradually become a core competency of companies.Therefore the high level of compensation has become an important weapon for companies to attract and retain senior management personnel.But the attendant question is whether senior executive compensation matches its performance or not.Therefore,how to measure the company performance accurately and objectively and to work out an efficient and reasonable senior executive compensation system has been a hot topic in recent years.As the company performance is largely influenced by some exogenous factors,it's necessary for companies to develop a set of performance evaluation methods which can filter the external environmental impact to evaluate the management ability and degree of efforts of senior executives,so the relative performance evaluation come into being.For senior executives in growth companies,the more growth opportunities the companies have,the more volatile environment senior executives face.Using the relative performance evaluation can reduce the amount of risk and provide insurance for senior executives against common exogenous shocks when they are in volatile environment.Is there any evidence of using the relative performance evaluation in the senior executive compensation contracts of listed companies in China? What is the relationship between company growth and the use of the relative performance evaluation in senior executive compensation contracts? These are the questions to be studied in this thesis.This thesis chooses manufacturing listed companies of Shanghai and Shenzhen from2012 to 2014 as the research sample,uses SPSS22.0 statistical software,tests whether there is an evidence of using relative performance evaluation through the combination of theory and empirical or not.That is,whether the formulation of senior executive compensation refers to the performance of the same industry or not,and further analyzes the relationship between the company growth and the usage of relative performance evaluation in senior executive compensation contracts.The results show that when selecting the return on assets and stock return rate as the indicator of accounting returns and stock returns to measure company performance respectively,there is an evidence of using relative performance evaluation in senior executive compensation contracts.The further result shows that the higher the growthof the companies,the lower the relative performance evaluation in executive compensation contracts,there is a negative correlation between the two sides.Based on the actual situation of listed companies in China,this thesis puts forward some reasonable suggestions from the aspects of evaluating company performance scientifically,hoping to improve the senior executive compensation system of listed companies in China.