Executive Compensation,dividends And Operating Performance

For a long time,the executive compensation mechanism based on the optimal contra ct theory(Murphy,1999)has made the principal-agent problem effective and has become the best choice to reduce the agent cost.However,the problems that arise in the imple mentation process have led many scholars to question this mechanism.The lack of extern al market supervision and the imperfect internal governance of the company make the ex ecutives in the process of business can take advantage,and then to maximize the interest s of shareholders to maximize the pursuit of self-interest.Research has proved that execu tives in the business process is easy to implement the profit of earnings management,an d thus affect the development of corporate executives pay and dividend level,the emerge nce of "executives get high salaries,shareholders dividends low" phenomenon.In recent y ears,frequent exposure of executives pay high salary,not the incentive incentive system under the results,which often contains executive compensation and operating results from the reality of the situation.In order to encourage the dividends of listed companies,the relevant state departments in 2001,2006 and 2008 have introduced a semi-mandatory div idend policy,the enterprise dividends and refinancing linked to the expected level of divi dends;and in 2009 also issued a Called "limit salary" of the "on the further regulation o f the central enterprises responsible person in charge of remuneration management guidan ce" to regulate the central enterprises in charge of the main person in charge.But for the central enterprises listed companies,executive pay is too high,the phenomenon of low c orporate dividend still exists.Based on the principal-agent theory and the theory of equity incentive,this paper m akes a theoretical analysis on the executive compensation and dividend policy of the liste d companies of the central enterprises.Secondly,on the basis of theoretical research and empirical research at home and abroad,Profit for the background,select the 2010-2015 China’s central enterprises listed companies and their holding subsidiaries of the data for the sample,the executive pay,dividends and business performance of the relationship bet ween the empirical study,further study between executive compensation and corporate di vidends Relationship.And to join the data of local state-owned enterprises,to further stu dy the different control under the executive compensation,corporate dividends and operat ing performance of the relationship between the three.The results show that there is a si gnificant positive correlation between executive bonus and executive performance of liste d companies in the central enterprises,and there is a significant substitution effect with t he dividend of the firm.The dividend of the enterprise has a significant positive correlati on with the operating performance.Under certain conditions,to improve the level of cor porate dividends can inhibit the enterprise’s on-the-job consumption;a certain extent,the implicit salary of executives will promote the improvement of business performance,corp orate dividend level corresponding increase.Finally,according to the theoretical and empirical research results,this paper puts fo rward the suggestions on how to improve the remuneration of the enterprise’s remunerati on and improve the dividend system of the central enterprises from the point of view of perfecting the long-term equity incentive,Dividends and operating performance of the rel ationship between the three proposals and policies to better coordinate the management a nd the interests of shareholders.