An Empirical Research On The Impact Of Executive Compensation Incentives On Corporate Performance

In recent years,the media frequently reported that some listed companies' executive compensation and the company's performance have "decoupled" phenomenon.According to the optimal contract theory and incentive theory,executive compensation should be closely related to company performance.At present,although most listed companies in China have implemented salary incentives linked to executive compensation and company performance,similar phenomena still exist.The theoretical circles have carried out in-depth and extensive research on the changing characteristics and causes of the relationship between executive compensation and company performance,and have achieved considerable research results.However,the research on executive compensation and company performance from the perspective of competitive strategy is relatively lacking.With the intensification of market competition,the competitive strategy is crucial to the survival and development of a company,executives play an important role in the formulation and implementation of the strategy,how to guide the behavior of executives,compensation is one of the key factors.Therefore,in order to explain the divergence of research conclusions about the relationship between executive compensation and company performance in academic research,and the phenomenon of "decoupling" between executive compensation and company performance in reality,it is of theoretical and practical significance to further study the correlation between executive compensation and company performance based on different competitive strategies.Based on the research results of scholars at home and abroad,the thesis studies the correlation between executive compensation incentives and company performance with the new perspective of competitive strategy based on principal-agent theory,manager compensation incentive theory and contingency theory,puts forward the relevant assumptions,and selects the financial data of listed companies in the A-share manufacturing industry in Shanghai and Shenzhen in the three years from 2015 to 2017 as research samples.Firstly,the clustering analysis method is used to classify the competitive strategy types of sample companies into differentiated strategies and cost leadership strategies.Then based on these two competitive strategies,this paper tests whether there are significant differences between the executive compensation incentives under the two competitive strategies and the impact of the executive compensation incentives on the company's performance under the two competitive strategies.The empirical results show that when formulating the executive compensation incentive mechanism,the company should pay attention to the degree of matching with the competition strategy;the higher the matching degree,the better the impact on the company's performance.At the same time,they should also pay attention to the rationality of executive compensation incentive under two competitive strategies,so as to avoid the negative impact of excessive or insufficient incentives on company performance.