The Research On The Relationship Between Executive Compensation Incentive And Firm Performance Based On Agency Cost Mediating Effect

Corporate governance is the important foundation of company management,control and development,agent theory suggests that the relationship between corporate governance and firm value depends on the severity of the potential agency problems.For a long time,scholars fromchina and abroad carried on the agency costs of research and got a series of achievements,principal-agent theory views that business owners must carry on the effective incentive for the managementto make the management behavior is consistent with the company owners,to reduce agency cost and improve corporate performance.Salary incentive is the most important part in modern company incentive,now,the problem of the related researchbetween compensation and corporate performanceat home and abroad,mainly concentrated on the relationship amongCEO.This article selects 2010-2015 state holding listed companies shanghai and shenzhenas samples,for screening of 1361 samplesand building “ executive compensation incentive-agency costs-corporate performance” as intermediary effect model,summarizing the three parts into a whole frame model to analyze,the study not only analyzes monetary compensation incentive variables influence on corporate performance,but also joins the equity incentive and on-the-job consumption variables as independent variables,adding multiple control variables for empirical testing.Using the way of“characteristics-behavior-conclusion” thinking to study what way executive compensation incentive to influence corporate performance,seting uppath model and puting the agency cost as a intervening variable to analyze the effect of executive compensation incentive on agent cost,thus affecting the relationship between corporate performance and executive compensation incentive,using Bootstrap method to test intermediary effect of agency costs.The study found that the first kind of agency costs caused the partial mediation effect between executive equity incentive and corporate performance,but the agency costs in monetary compensation,on-the-job consumption and corporate performance did not exist intermediary effect.Another discoveries: It was significantly positively related between equity incentive and corporate performance.Finally,according to the empirical research conclusions,this articleprovided constructive suggestions to improve corporate performancefor the state-owned listed companies,for instance,establishment of corporate executive compensation incentive mechanism and reduction of the agent cost.startingof three aspectsfrom the monetary compensation,equity incentive,on-the-job consumption,the article provided policy advice to improve corporate performance,at the same time,pointed out the deficiency existing in the article,and the future research direction.