Executive Compensation Incentive,Risk Taking And Enterprise Innovation Performance

As the core module for constructing the internal governance structure and supervision system of company,executive compensation incentives not only promote the establishment of advanced systems in line with their own development,but also have great significance on company daily financial operation performance,especially innovation performance.In modern society,innovation is the first driving force of company development.It is the strategic support of the enterprise management development system and the inexhaustible source of company's technological progress.However,under the influence of the changing external market environment,innovation becomes extremely uncertain.Innovation has a long period of converting achievements,and it will change due to various factors in the process.Uncertainty needs enterprises have strong risk-taking capabilities.The level of risk-bearing will affect the market competitiveness of enterprises,which in turn leads to differences in innovation performance.The senior management is in the senior leadership position of the company,and bears the key tasks such as the formulation and implementation of major decision-making,the allocation of core resources and the selection of innovative projects.We can regard that the risk-taking level of senior management represents the risk-taking level of company.Different executive compensation incentives will have differences in the propensity of executives risk-taking,which can be manifested as incentives,guidance,or as a constraint.Therefore,the rationality of executive compensation incentives will affect the level of risk-taking of executives.That is to say,will affect the level of risk-taking of executives,which will further affect the innovation performance of enterprises.To clarify the internal relationship among executive compensation incentives,risk-taking and corporate innovation performance,have great importance for establishing and improving the corporate executive compensation incentive system and internal governance mechanism,will promote the long-term healthy development of enterprises.This paper selected thle private listed companies in the A-share market of Shanghai and Shenzhen stock markets in 2013-2017 as a research sample,and selected 1074 companies,including 248 labor-intensive enterprises,275 capital-intensive enterprises and 551 technology-intensive enterprises.This paper used the panel data analysis method,which is commonly used in economics and used Stata software for analysis,and did descriptive statistical analysis on the total sample,and did the mediation effect test and adjustment effect test.This paper systematically analyzed the executive compensation relationship among incentives,risk taking,and corporate innovation performance.Through empirical tests,the following conclusions were drawn;(1)Executive monetary compensation incentives and shareholding incentives are positively related to corporate innovation performance;(2)Executive compensation incentives have positive influence on risk-taking,and risk-taking can improve corporate innovation performance.After being rewarded by compensation incentives,executives can enhance risk-taking ability,innovation performance can be increased.That is to say,risk-taking acts as an intermediary between executive compensation incentives and enterprise innovation performance;(3)Large shareholders in private listed companies executive compensation incentives have regulatory effect on the influence of corporate innovation performance,and the regulatory effect is inverted U-shaped.(4)In different industries,the effect of executive compensation incentives on enterprise innovation performance is different,and the technology-intensive industries are more effective than the other two industries.Based on the conclusions from the empirical test,combined with the current economic environment,national policies and the actual operating conditions of private listed companies,this paper proposed several measures for improving the executive compensation incentive system,and hope to help improve the innovation performance of private listed companies.