Research On Effectiveness Of The Executive Compensation Incentive In Wuliangye Group Based On Enterprise Performance Perspective

With the continuous development and improvement of China's market economic system,the reform of state-owned enterprises have been carried out in an orderly way.On May 3,2017,the State Council has issued the “Opinion on the further improvement of the corporate governance structure of state-owned enterprises”,which clarifies the basic principles of the “the role of law,the accrual peer”.The “Opinion” emphasizes on straightening the responsibilities of investor;stimulating manager's vitality and other norms of subject responsibility;and improving the corporate governance structure in accordance with the rules of socialist market economy,so as to enhance the operational efficiency of enterprises.In state-owned enterprises,the top management team is the core of the enterprise.It is the helmsman of the enterprise management,whether the enterprise in the fierce competition in the market environment in the wind waves,the key lies in the top management team to develop strategic goals,scientific and rational principles and policies.The impact of top management behavior on firm performance is particularly important.However,the rationality and effectiveness of executive compensation and remuneration have attracted much attention and questioned by the society.In the listed companies,the separation of ownership and management,the birth of principal-agent are all the problems.In order to effectively solve the principal-agent problem,the effective incentive and constraint mechanism must be established to maximize the interests of agents and principals and achieve the win-win purpose.With the continuous improvement of China's capital market and the steady progress of the reform of the share structure reform,more and more executives begin to hold shares in the listed companies.The purpose of executive compensation incentive is to link the interests of the principal and the interests of the agents.It can not only reduce the agency costs,but also improve the performance of enterprises,and form a long-term incentive and restraint mechanism.Although the effectiveness of executive compensation incentive cannot be evaluated directly,but the effectiveness of executive compensation incentive can reflect various aspects in the development of enterprises,enterprise performance based on the perspective of this paper,through literature research,quantitative analysis,case study method,Wuliangye listed companies have 19 years of data missing data China's liquor and 31 listed companies a total of 519 samples,with Wuliangye's total assets profit rate(ROA),asset liability ratio(DAR),total asset turnover ratio(TAT),sustainable growth rate(SD)performance index,assignment weighted enterprise performance as the dependent variable by entropy method the executives holding number;the proportion of managerial ownership,executive compensation ratio as independent variables;the money supply(M2)growth rate and GDP growth rate as the difference of control variable This paper tries to reveal the effectiveness of executive compensation incentive in Wuliangye company from the perspective of corporate performance.The empirical results show that,in consideration of inflation,the proportion of managerial ownership is positively related to performance and the number of executives holding company and Wuliangye,not associated with the proportion of executive compensation,executive compensation incentive policy is the Wuliangye company has good promotion effect on corporate performance,but the incentive methods should be preferred executives shareholding ratio increased,followed by increase the number of executive stock ownership,and monetary compensation to improve the performance of the company lack of significant effect.Analysis of the reasons for the development of China's capital market is not perfect,the domestic liquor listed companies long-term incentive measures are inadequate,the lack of restriction mechanism and effective management of external environment is not standardized,and the performance of the company in addition to the factors that affected the executive management ability,effort,but also by some executives of uncontrollable factors(such as political and economic environment the environment influence,etc.)and the influence of these factors is monetary incentive cannot be eliminated.Finally,on the basis of the empirical results,some suggestions are put forward,such as improving the existing incentive mechanism and restraint mechanism,and regulating the external environment.