Executive Motivation,Market Development Degree And Performance Volatility

All kinds of ways to motivate senior executives do not play a single role,but combine and interact with each other to break through the limitation of a single way,so as to achieve the goal of motivation,and thus affect the behavior of managers and the performance of the company.At different levels of executive stock ownership,this paper studies the combination of executive stock ownership and monetary compensation to the company performance volatility by combining qualitative and quantitative analysis.Based on the sample of Shanghai and Shenzhen A-share listed companies with monetary compensation and executive shareholding compensation from 2006 to 2015,this paper conducts an empirical study with the help of linear regression model.According to the historical average level of executive shareholding,the samples were divided into three groups:low,medium and high for regression,and a conclusion was drawn.When the proportion of shares held by senior management of a company is different,executive shareholding compensation and monetary compensation have different combination methods.When the average shareholding ratio of executives is less than 0.0028%,the volatility of corporate performance increases with the increase of the shareholding ratio of executives.Monetary compensation has a significant positive impact on the company’s performance volatility,weakening the positive correlation between executive shareholding and performance volatility.At this time,monetary compensation and executives’ shareholdings are mutually replaced.When the historical average of executive shareholding increased to more than 1.0205%,the volatility of company performance decreased with the continuous increase of executive shareholding.While monetary compensation has a significant positive impact on performance volatility,it also significantly reduces the negative correlation between executive stock ownership and performance volatility.Monetary compensation and executive stock ownership complement each other.By distinguishing the different degree of market development,it’s found that when the degree is low,the lower the shareholding ratio of senior executives,and the more significant the influence of the combination of executive shares and monetary compensation on the performance volatility is.With the improvement of market,the influence of executive stock ownership and monetary compensation on performance volatility is more significant.The study enriches the literature on the influence of different incentive modes on performance volatility,details the combination mechanism of different incentive modes,and links the two typical compensation modes with the company’s performance volatility.At the same time,the influence of different combinations of executive stock ownership and monetary compensation on performance volatility is obtained under the regional values of different executive stock ownership ratios.It is of certain ref-erence value to design dynamic and diversified executive compensation schemes for different environments and purposes and to optimize the compensation incentive effect.It is of certain reference value to design dynamic and diversified executive compensation schemes for different environments and purposes and to optimize the compensation incentive effect.