A Study On The Influence Of Rural Credit Cooperatives' Executive Incentive On Performance

In 2010, under the guidance of the relevant equity reform, the joint-stock commercial banks in rural areas have been identified as the final form of the property rights reform of rural credit cooperatives. With the development of rural credit cooperatives to the joint stock system,perfecting the corporate governance structure of rural credit cooperatives, and improving the efficiency of corporate governance of rural credit cooperatives are more and more concerned.As an important aspect of corporate governance, executive incentive is very important to the sustainable development of rural credit cooperatives. However, there are few literatures about the incentive of executives in rural credit cooperatives. Some scholars have just studied the level of executive compensation and the proportion of shareholding in rural credit cooperatives.There are fewer researches on the current consumption of executives of rural credit cooperatives. Therefore, in this paper, we study the impact of executive incentive on the performance of rural credit cooperatives, and increase the impact of the executive consumption on the performance of rural credit cooperatives. Taking into account the rural credit cooperatives has dispersed ownership structure for a long period, lacking major shareholders and dominant shareholders, minor shareholders lack willingness and motivation of monitoring management of rural credit cooperatives, limiting the effect of executive incentive mechanisms.Therefore this paper introduces the ownership structure (including ownership concentration and equity balance degree) as a variable, empirically studying the impact of ownership structure on executive incentive and performance of rural credit cooperatives.Firstly, based on related literature review and principal-agent theory, human capital theory,study the executive monetary compensation and managerial ownership, executives perquisite consumption influence on the performance of rural credit cooperatives and the mechanism of the moderating effect of equity concentration and equity balance on executive incentive and performance of rural credit cooperatives, this paper puts forward the corresponding research hypothesis. Then choose the data of 52 Rural Credit Cooperatives of Shaanxi Province, time span from 2010 to 2015, a hierar-chical regression model was constructed to carry out empirical analysis. The empirical results show that: the positive correlation of executive monetary compensation and rural credit cooperatives support efficiency and profitability; the proportion of managerial ownership and the rural credit cooperatives agriculture efficiency significantly negative correlation, significant positive correlation with the business risk; The active consumption of executives is positively related to the profitability of rural credit cooperatives,and negatively correlated with operating risks, and the incentive effect of executives' on the job consumption is better. Ownership concentration and equity balance degree on the relationship between managerial ownership and performance of rural credit cooperatives have significant moderating effect, the proportion of managerial ownership and performance of rural credit cooperatives has weaken the negative relationship. Finally, according to the empirical results,this paper puts forward some suggestions from three aspects, such as strengthening shareholder's restraint on management, improving executive incentive mechanism of rural credit cooperatives and strengthening internal and external supervision.