Study The Dynamic Effect Of Executives' Compensation On Corporate Performance

The relationship between executive compensation and corporate performance has always been an important subject of research at home and abroad.Compensation incentives are important ways for executives to increase their contribution,improve corporate performance,and prevent self-interest.Executive compensation is fundamentally the reallocation of resources,reflecting the level of incentives and ways.Motivation can often play a sustained role in the subject of the body,executive compensation as a way to encourage them,have long-term influence on corporate performance.In the modernization of economic management,due to the impact of the system environment and policy transmission,economic activities of the main planning,decision-making and action often need a certain process,and taking into account the continuation of people's daily habits,technical conditions or institutional restrictions the relevant factors,changes in economic variables are often accompanied by the emergence of time lag and persistence.Usually independent of the dependent variable and the dependent variable is not synchronized with the relationship,and this relationship may be expressed as a lag,but also there may be a delay or sustained effect.Based on the unique economic system environment,based on the theory of corporate governance,based on the theory of agent,the theory of Porter and Lawless comprehensive incentive,the theory of management rights and the theory of tournament,this paper discussed the relationship between executive compensation,the process and mechanism of influencing company performance.And combined with the practice of listed companies in Shanghai and Shenzhen A-share listed companies,the impact of executive compensation on corporate performance is studied,and the impact on corporate performance is explored from the three aspects of executive :compensation level,structure and gap.However,this study not only focuses on the impact of executive pay on the company's current performance,but also on the dynamic and sustainability of the impact,which is the impact of executive pay on corporate performance in subsequent years.The study found that executive pay levels have a positive effect on corporate performance,and as the level of executive compensation increases,the company's current and future performance will respond positively.And the short-term incentive in the pay structureof the currency,the performance of the company has a positive role in the year,although this effect will not continue until the follow-up year.In addition,on the basis of monetary compensation to join the executive holdings and on-the-job pay structure,compared to only the structure of monetary remuneration the impact of corporate performance is weaker.The equity incentive in the pay structure does not show the relationship with the performance of the firm in the current period,but it is significant in the relationship with the future performance.Executive pay gap can also continue to promote the role of corporate performance,and showing a dynamic increase.Therefore,the company in the establishment of executive compensation,the full consideration of its impact on corporate performance,reasonable to raise the level of pay,pay attention to the structure of the monetary remuneration and on-the-job consumption,and further explore the long-term incentive role of equity and the appropriate set of major executives and ordinary the pay gap between executives makes it possible to motivate executives to contribute to the company's growth.