Empirical Research On Executive Compensation And Corporate Performance

With the development of the modern enterprise system in China and the deepening of the market-oriented reform of state-owned enterprises,the correlation between executive compensation and company performance has always been the focus of attention of the academic community and the public.On January1,2015,Reform Plan for the Remuneration System of Persons Responsible for Central Management Enterprises was formally implemented and required the reference of local state-owned enterprises to achieve the goal of making the remuneration control of central and local state-owned enterprises an important issue.Therefore,exploring the actual effects of property rights and industry nature on the correlation between executive compensation and corporate performance in Chinese state-owned enterprises,effectively assessing the effects of micro-governance caused by government compensation regulation and market-oriented reforms,and improving the corporate governance of state-owned enterprises in China is of great significance to improve operational efficiency and market competitiveness.This article takes the Shanghai-Shenzhen A-share public companies in 2012-2017 as the research object,taking the lagging period of executive compensation as the explanatory variable,and the ROE after deducting non-recurring gains and losses as the explained variable.The following three issues were studied: First,the correlation between executive compensation and company performance was studied based on the nature of property rights;second,based on the nature of the industry,the executive compensation of state-owned enterprises and monopolistic state-owned enterprises in competitive industries was The related issues of the company's performance were further explored;finally,the policy effect of the new round of wage restriction in state-owned enterprises of different industries in China was tested.Specifically,the research results of this paper show that the executive compensation of public companies in China(including financial companies)is significantly positively correlated with company performance,and the positive correlation between the executive compensation of the private company and company performance is stronger than that of the state-owned enterprises;In the company,the positive correlation between executive compensation and company performance in competitive industry companies is stronger than that in monopolistic industries;from the current research results,the implementation of the new round of wage restrictions in 2015 not only failed to increase the executive compensation of state-owned enterprises and the sensitivity of the company's performance has even shown negative effects on the state-owned enterprises in the competitive industries.This article's innovation and research contributions are mainly reflected in the following three aspects: First,this article not only tests the correlation between the executive compensation of the non-financial public companies in China and the performance of the company,but also conducts an analogical study on the financial public companies,which enriches the research content of the public company's executive compensation and company performance sensitivity;Second,in the study of the issues concerning the correlation between executive compensation and corporate performance of state-owned public companies in China,this article elaborates on the nature of state-owned enterprises based on the nature of the industry,and conducts group inspections on state-owned enterprises in competitive industries and state-owned enterprises in monopolistic industries.Compare the test results and propose specific countermeasures and suggestions;Third,improvements have been made to the measurement of company performance(the explanatory variables of the model).Domestic and foreign scholars have different conclusions about the correlation between executive compensation and company performance.The main reason may be reflected in the choice of empirical research variables.Through the collection,thinking and differential analysis of historical documents,this paper selects the return on net assets after deducting non-recurring gains and losses as an explanatory variable to measure the company's operating performance and mitigate the interference of other factors with empirical model research.