Research On The Correlation Between Relative Performance And Executive Compensation

The establishment of the modern enterprise system and the separation of the two powers in the enterprises of our country have deepened the conflict of interest between the company owner and the operator.How to accurately assess the level of management's actual performance during its term of office has increasingly become the focus of attention of the company's owners.Experts and scholars at home and abroad generally believe that the use of relative performance in the formulation of executive compensation can effectively filter the impact of external uncertainty on the performance of executives,so that business owners can more accurately assess the level of executive performance.However,the relative performance of the company's use of the company will be affected by various internal and external factors,there is a certain cost,the use of promotion of relative performance in the formulation of executive compensation is not easy.In particular,China's special political and economic environment makes it impossible for foreign mature development of relative performance evaluation systems to be applied directly to listed companies in China.This article sums up the general research results and the latest development of relative performance evaluation theory both at home and abroad,based on the data of 2012-2016 listed companies in the information technology industry in Shanghai and Shenzhen,using Ana Albuquerque(2009,2012).)An empirical test model was constructed to examine the correlation between executive compensation of listed companies and corporate performance and peer performance.The results show that the use of accounting indicators,China's listed companies in the information technology industry there is evidence of the use of relative performance when determining executive compensation,executive compensation and company performance are positively correlated,and negative correlation with peer performance.When using market indicators,there is only a positive relationship between executive compensation and company performance.This article also discusses the relative performance of the use of listed companies in the state-owned and non-state-owned information technology industries.It is found that relative to state-owned enterprises,non-state-owned enterprises are more likely to use relative performance when formulating executive compensation.The subsequent robustness test also supports the above conclusions.