Research On The Relationship Between Executive Incentives And Corporate Performance

With the development of global economy,the competition between enterprises is increasingly fierce.As the main operators of enterprises,executives' business behaviors and business decisions can largely affect the future development of enterprises and become one of the core competitive factors of enterprises.However,in the actual production and operation process of enterprises,the agency contradiction between executives as operators and shareholders is increasingly prominent.In order to effectively alleviate this contradiction and reduce agency costs,enterprises have implemented executive incentive measures one after another.The relationship between executive motivation and corporate performance has become the focus of academic and practical circles.In view of this subject,many scholars at home and abroad have conducted a lot of exploration and research,but have not reached a consistent conclusion.Since the reform and opening up,China has made remarkable achievements in economic development over the past 30 years,but there are still some bad phenomena in the whole process of social development,such as the breeding of corruption and frequent transactions of power and money.This kind of phenomenon is not conducive to the resource allocation of enterprises,but also may increase agency costs within the enterprise,seriously affecting the survival and development of enterprises.Since the 18 th national congress of the communist party of China(CPC),anti-corruption efforts have been strengthened,social atmosphere has been cleaned up,a good competitive environment has been created for enterprises,and space has been provided for the research on the role of anti-corruption in the relationship between executive incentives and corporate performance.This paper believes that different forms and degrees of executive incentive have different impacts on corporate performance.An in-depth analysis of the relationship between executive incentive and corporate performance can provide reference for the design of corporate executive incentive mechanism.At the same time,with the strengthening of anti-corruption,the external environment of the enterprise has changed significantly,and the impact of this change on the incentive effect of senior executives is also worth in-depth exploration.Based on this,this paper selected A-share non-financial listed companies in Shanghai and Shenzhen from 2007 to 2017 as research samples,and explored the relationship between executive incentive and corporate performance through relevant theoretical analysis and empirical research,as well as the moderating effect of anti-corruption on the relationship between them.In the research,the executive incentive is divided into three common incentive forms,namely monetary incentive,equity incentive and on-the-job consumption,and the relationship between them and corporate performance is studied respectively.Secondly,anti-corruption variables are introduced into the model to explore its potential role in the relationship between executive incentives and corporate performance.Thirdly,grouping regression and endogenous analysis were performed on the study samples,and robustness test was conducted on the conclusions.Finally,in order to further explore the impact of different levels of executive incentives on corporate performance,this paper divided executive incentives into two groups according to the industry average,high and low levels of incentive,respectively for empirical research,in order to provide reference for the design of the actual incentive mechanism of enterprises.After empirical research and analysis,this paper comes to the following conclusions.Firstly,monetary incentive,equity incentive and in-service consumption all have significant positive effects on enterprise performance.The incentive measures adopted by enterprises for senior executives can effectively stimulate the enthusiasm of senior executives and improve enterprise performance.Second,anti-corruption exist in the relationship between executive incentive and corporate performance significantly adjust action,it is worth noting that the regulation on the equity incentive and corporate performance and on-the-job consumption and between enterprise performance is positive,namely to strengthen the incentive effect,while the effect in the relationship of monetary incentive and corporate performance is negative,which weakens monetary incentive effect,this may be due to the fact after the anti-corruption efforts,the original dropped sharply as a result of improper means to obtain benefits,to a certain extent affect the corporate performance.However,on the whole,the strengthening of anti-corruption is conducive to the stable development of enterprises in the future.Finally,in monetary incentive,high degree of incentive effect is better than low degree.However,in equity incentive,low degree of incentive cannot significantly affect performance,and only high degree of incentive can promote the improvement of enterprise performance.Compared with excessive on-the-job consumption,lower level of on-the-job consumption has better incentive effect.On the basis of the research conclusions,this paper puts forward corresponding Suggestions,in order to provide reference for the design of incentive mechanism and internal governance of enterprise executives and the formulation of macro policies.In addition,this paper further analyzes the limitations of the research and future research prospects,and provides some Suggestions for the research of other scholars.