Research On The Effect Of Executive Compensation,R&D Investment On Corporate Performance

Innovation is the soul of the nation's progress,the driving force behind the nation's prosperity,and the eternal engine of the development of modern enterprises.Although private enterprises have developed rapidly in recent years and their overall strength has greatly improved,their ability to innovate is still weak compared with developed countries.The atmosphere of “mass entrepreneurship and innovation” has provided a fertile ground for China's private enterprises to transform their economic development methods,enhance their overall strength and competitiveness relying on scientific and technological progress.Private enterprises,as the most dynamic part of the market economy,should seize the opportunity to realize “taking over the curve” during the current period of deepening financial and economic system reforms.However,is the continuous increase in R&D investment effective for enhancing the innovation capability of private enterprises in China? Is the increase in R&D investment apparently effective for private enterprises in China to improve current company performance? Furthermore,will the senior executive compensation,as an incentive method,have a regulatory effect on the R&D investment and corporate performance of private enterprises in China,all of these questions need to be clarification.Firstly,this article introduces the background of the topic and the significance of the research.Based on the review of the relevant literature,the content,method and innovation of the article are elicited.Secondly,the related concepts of the theme of the article are defined,the theoretical basis of the article and the theoretical mechanism of the effect of R&D investment on corporate performance,executive compensation and the effect of R&D investment on performance improvement is described.Thirdly,based on theoretical analysis,this article collects relevant data of privately-listed companies from 2005 to 2015 in the private-owned listed company database of Guotai An and Wind,and processes the data through Excel and stata.Based on the largest possible sample,the theory and Empirically combined methods,hierarchical adjustment of the regulatory effect of the relationship between the R&D investment of Chinese private listed companies and the current corporate performance,senior management short-term monetary compensation for the relationship between the two,and the long-term equity compensation of senior executives.Grouped by region.The research results show that:1.China's private listed companies' R&D investment is significantly positively correlated with current corporate performance;2.China's private listed companies' executives' short-term monetary compensation has a significant positive adjustment effect on the relationship between R&D investment and corporate performance;3.The long-term equity remuneration of executives of private listed companies does not have a significant positive adjustment effect on R&D investment and current company performance;4.The above research conclusions in the eastern,central and western regions are gradually weakening.According to the research conclusions,the following suggestions are put forward: 1.China's private enterprises should pay more attention to R&D investment,increase R&D investment and the ability to transform achievements;2.China's private enterprises should further improve their compensation structure and appropriately increase the number of executives' Short-term Monetary Salary Incentives in improving their corporate governance mechanisms;3.The government should adopt diversified measures to guide,encourage,and support private enterprises to attach importance to and accelerate the pace of innovation.In particular,it should increase support for all aspects of the central and western regions.Efforts should be made to speed up the pace of its marketization and narrow regional development differences,so as to enhance the overall strength of private enterprises.