The Study On The Relationship Between Executive Compensation And Enterprise Performance In Listed Companies Of Pharmaceutical Biology

With the development of economy at home and abroad,enterprise performance has been paid more and more attention by relevant stakeholders.It is one of the important subjects that we should study effectively to improve the enterprise performance and realize the optimization of enterprise value and stockholder's rights and interests.Executives play an important role in the enterprise for business performance and optimization of rights and interests.Since the existence of benefit divergence between executives and shareholders,executives are unable to do their best to serve shareholders.If the executive compensation system is reasonable and effective,it can not only help us solve the contradiction between executives and shareholders,but also help the optimization of enterprise value and shareholders' rights and interests.In recent years,the pharmaceutical biology industry of our country develops fast with great increase of salary,however the talent flow speed is higher in this industry.Therefore,under the condition for separation of the right of management from the right of ownership,it has obvious significance for survival and development of the listed companies of pharmaceutical biology to complete the compensation plan of the enterprise in order to make the executives work harder and improve the performance of enterprise.On the basis of the existing research results,this paper collect the financial data of pharmaceutical biology industry from 2012 to 2016.Through principal component analysis,the enterprise performance indicator is integrated as the explained variable,and executive compensation is taken as the explaining variable.The correlation between two variables was studied by the methods of descriptive analysis,correlation test and regression analysis,The empirical results show that it has positive correlation for executive monetary compensation,compensation dispersion of executives and shareholding ratio of executives.Among them,executive monetary compensation and compensation dispersion of executives have more significant effect for enterprise performanceBased on the result of empirical research,this paper draws the following conclusion:(1)Executive monetary compensation can greatly promote enterprise performance.(2)The compensation dispersion of executives can improve the enterprise performance.(3)The shareholding ratio of executives can improve the enterprise performance.Based on the above conclusions,this paper puts forward the guidance of designing the salary system of senior executives from three aspects:perfecting the annual salary system,widening the compensation dispersion and improving the shareholding system.This paper attempts to provide the necessary basis for the establishment of incentive and effective compensation mechanism for the listed companies of pharmaceutical biology in China.