Research On Relevance Between Government Subsidy,Executive Compensation And Firm Performance

In order to effectively solve the problem of principal-agent between shareholders and senior executives,it is an effective method to link pay with performance in accordance with the optimal contract theory.In recent years,however,the phenomenon of “high-price compensation” and “payroll inversion” have become commonplace.Executive compensation is not only unrelated to performance.Even when performance declines,senior executives are bucking the trend and causing serious executive overpayment problems..From the perspective of government subsidies,this paper studies the causes of this excess remuneration phenomenon.That is,the government subsidy,which is non-recurring profit and loss income,can easily become the “noise” of compensation performance.On the one hand,it accounts for the current profits of enterprises and eliminates the need for enterprises to use them.At any cost,you can improve your performance.On the other hand,executives will rely on government subsidies to grow their business performance.They are prone to lazy behavior and even use their power to gain direct personal gain.It can be seen that the government subsidy obtained by the company is alienated in terms of its implementation effect.Through the research and analysis of this article,it provides a reference for the state in regulating the implementation of government subsidies policy,provides a basis for promoting the current salary reform system,and provides direction for reducing agency costs.Based on the background of this study,after summarizing domestic and international literature on government grants and executive compensation and corporate performance,based on principal-agent theory,optimal contract theory and management power theory,the following hypotheses are proposed: government subsidies and high The salary of the management is positively correlated,positively correlated with the excess remuneration of the senior executives,and negatively related to the performance of the companies under the influence of the executives.Through selecting the data of all A-share listed companies in China from 2013 to2015 as samples,design appropriate variables and measurement methods,construct a regression model,use EXCEL to summarize the data,and then use STATA to do data analysis and regression testing.This verification hypothesis and draws conclusions of the study,and then according to this conclusion put forward the corresponding policy recommendations and the deficiencies in the research process.Through the regression analysis of the data,the following conclusions are drawn:(1)The government subsidies are significantly positively correlated with the executive compensation.That is,the more subsidies,the higher the executive's compensation will also increase.(2)The government subsidy will lead to the occurrence of excessive pay for senior executives,that is,government subsidies provide an explanation for the sources of executives' excess pay.(3)The effect of government subsidies on executive compensation,especially excess remuneration,will have a significant negative impact on the company's future performance.That is,the occurrence of executives' excess remuneration is not conducive to the increase in the performance of listed companies.In view of the above conclusions,the relevant recommendations are proposed only on the three aspects of optimizing the internal governance structure of enterprises,standardizing the effective implementation of government subsidies,and improving the performance evaluation mechanism of senior executives.The innovation of this paper is to discuss the impact of executive compensation on corporate performance from the perspective of government subsidies,and to provide reference for the rationality of corporate salary design.