Executive Compensation,Equity Structure And Enterprise Performance

Since the third Plenary session of the 18 th Central Committee in 2013,the reform of state-owned enterprises in China has taken a solid pace,the top-level design framework gradually clear,mainly involves four aspects: First,the reform of mixed ownership.Ownership stake in the substantial release of the nature of the industry;Second,the reform of the salary system.The market hiring and administration appointed executives to take a different pay system the former,compensation will be more market-oriented;Third,the equity incentive;Fourth,improving the overall layout of state-owned enterprises.Among them,the important content of the reform of state-owned enterprises is the development of mixed ownership economy,mix for important breakthrough in the reform of state-owned enterprises,has achieved positive results.There are more than 2/3 central enterprise subsidiary enterprises of all levels achieved mixed ownership,the formation of the 3batches of 50 state-owned enterprises of mixed reform pilot.As one of the first complete mix change Oriental aviation logistics Co.Ltd.,leading in Lenovo,Debon,Papadopoulos and Shanghai green four external investors hold a total of 45% stake in China Eastern Airlines and the core ESOP 10%,group shareholding ratio fell to 45%,the change in the mix of making corporate social,economic benefits to improve.Through the mixed Reform of Chinese Electronics,the operating profit reaches the highest level in history in 2017.Since 2015,the current executive compensation of SOE reform step by step,get the range of about 20%-30%.For the current reform of state-owned enterprises,state-owned shares will enhance the enterprise performance? Whether the equity diversification has a significant impact on the firm performance? Should limit SOE executives pay?This paper applies the theory of property right,private income of control,principal-agent theory and resource allocation efficiency theory to analyze the ownership structure,which is divided into three aspects: state-owned stock,ownership concentration and equity balance.Hypothesis 1: The proportion of state-owned shares is negatively related to enterprise performance;Hypothesis 2: Executive compensation can suppress the sensitivity between state-owned shares and performance,and the inhibition effect is more obvious in the reform;Hypothesis 3: There is a negative correlation between equityconcentration and firm performance;Hypothesis 4: Executive compensation can negatively adjust the relationship between equity concentration and performance,and in the reform of the corporate inhibition effect is more obvious;Hypothesis 5: Equity checks and balances and corporate performance positive correlation;Hypothesis 6: Executive compensation can inhibit the sensitivity between equity checks and balances and performance,and in the reform of the corporate inhibition effect is more obvious.In order to verify the hypothesis of this paper,741 state-owned listed companies in Shanghai and Shenzhen A shares in 2013-2016 were selected as the research samples,198 of them as reform samples,and 543 state-owned enterprises outside of state-owned enterprise reform concept stocks as unreformed samples.Empirical test of the proportion of state-owned shares,equity concentration and equity checks and balances on the relationship between performance and executive compensation respectively on the regulatory role between the two.At the same time,to explore whether the reform on the role of executive compensation adjustment differences.The empirical results show that:(1)There is a significant negative correlation between the proportion of state-owned shares and firm performance,the assumption 1 is verified;(2)Executive compensation can inhibit the negative correlation between the proportion of state-owned shares and enterprise performance,moreover,the reform can increase the inhibitory effect of executive compensation,hypothesis 2 is veridied;(3)Equity concentration is positively correlated with performance,hypothesis 3 is verified;(4)Executive compensation of state-owned enterprises can reduce the sensitivity between ownership concentration and firm performance,and the inhibitory effect is more obvious in the reformed enterprises,and hypothesis 4 is verified;(5)There is a significant positive correlation between equity checks and balances and performance,assumption 5 is verified;(6)Executive compensation is not sensitive to inhibition of equity concentration and performance,while hypothesis 6 is not verified.The reason may be that executive pay has a different impact on performance because of different levels of equity checks and balances.Therefore,in the process of mixed ownership reform,the state-owned enterprises should continue to follow the guidance of the state policy of reducing state-owned capital,integrate the resource advantages of non-public capital,and limit the dominantphenomenon in the ownership structure of state-owned enterprises.To improve the vitality of the market economy of state-owned enterprises,it is also necessary to regulate the executive compensation of state-owned enterprises accordingly,to speed up the implementation of measures to limit the pay of executives in state-owned enterprises,and to carry out scientific management of the ownership structure and executive compensation of state-owned enterprises.In order to give more effective play to the due reform of state-owned enterprises.The innovation and contribution of this paper lies in:(1)Under the background of current state-owned enterprise reform,from the perspective of mixed ownership reform,this paper empirically analyzes the relationship between ownership structure and performance from three aspects: ownership nature,ownership concentration and equity balance.This paper analyzes the changes of the relationship between the characteristics of the ownership structure and the performance of the state-owned enterprises,and provides reference significance for the arrangement of the equity structure of the state-owned enterprises to carry out the reform.(2)At the same time,it combines with the standard management of the high management salary in the reform of the state-owned enterprises.This paper studies the role of executive compensation in the adjustment between equity structure and enterprise performance,and further analyzes whether the reform has different inhibitory effects on executive compensation,and provides the support basis for the management of executive pay restriction in state-owned enterprises.