Research On The Relationship Between Senior Executives' Human Capital Premium And Enterprise Performance In Securities Industry

Since the 1990 s,securities industry has developed rapidly in China.Experienced large fluctuations in several economic cycles,China's securities industry has not yet matured.With several major regulatory reforms from 2017 to 2018,the securities industry has entered an important period of transformation and innovation.Due to the special nature of this industry,senior executives in the securities industry are all high-level talents with comprehensive qualities in all aspects.This also makes the executive compensation level of the securities industry always in the forefront of the all industry.But whether the high level of compensation can effectively encourage corporate executives to increase their efforts and the extent to which the level of compensation is most conducive to the improvement of enterprise performance need further exploration.This paper takes the listed companies in the securities industry as the research object,start with studying the composition of executive salary,comparing the incentive effect of executives' normal human capital gains and executives' human capital premium on executives' behavior.Explore the reasonable range of human capital with a view to providing reference for the design of the executive salary system for the securities industry in China.On the basis of existing researches,this paper expands the concept of human capital premium and defines the premium of human capital as the salary difference between homogeneous labors.Therefore,in salary structure,the premium of human capital is the part that cannot be explained by the characteristics of normal human capital.In this paper,we use the residual difference method of wage difference decomposition to quantify the premium reward of executives in the sample companies,and find that there is indeed a premium of human capital in executives' compensation of securities firms.However,the degree of difference of human capital premium in different company is greater,some sample companies have negative premium situation.At the same time,based on the special characteristics of the securities industry and the purpose of this paper,the principal component analysis method was adopted to reconstruct the enterprise performance evaluation system.The quantified results show that the sample company's enterprise performance was greatly affected by the market.Secondly,according to the quantitative results of executive human capital premium and enterprise performance,this paper constructs multiple panel models to explore the quantitative relationship between them,and finds that the fixed effect model of individualhas the best fitting effect.The results show that the premium of executive human capital in listed securities firms does have an impact on enterprise performance,but different companies may have different effects.The relationship between the executives' human capital premiums and enterprise performance in most of the sample companies are reflected U-shaped.Moreover,the premium of executive human capital in listed securities firms will also be affected by the market.In this paper,the model is further optimized,and the effective incentive range of the securities industry executives' human capital premium is discussed with the differential equation.Finally,based on the results of this paper,it summaries the quantitative relationship between the executive human capital premium and the enterprise performance of the securities industry.According to the special characteristics of the securities industry,this paper proposes some suggestions to further optimize the executive compensation design.