Research On The Relationship Between Corporate Performance And Top Management Team

This paper studies the top management team’s impact on the companyperformance. Firstly, we use the production function theory divided listed companisinto three sectors: capital-intensive, labor-intensive and technology-intensive, in orderto study the characteristics of different industries, make specific recommendations.For the top management team’s impact on company’s performance, the paper studiestwo aspects:firstly, the top management team incentives, including equity incentivesand monetary incentive; secondly, the background characteristics of top managementteam.This paper establish linear model between the top management team incentivesand corporate performance on the three industries respectively and analyze the degreeof its impact on corporate performance by the significance of the variable in themodel. The results show that: Some industry executives incentive system is imperfect;In the same industry, the impact of equity incentives and monetary incentives isinconsistent; in different industries, the same kind of executive incentives hasdifferent effect.In this paper, we use panel model to study the relationship between the team’sbackground characteristics and corporate performance to reveal the backgroundcharacteristics’ impact on company performance. The research shows that: in thesame industry, different background characteristics of the executives had differenteffects: positive effects, negative effects and no effects; the impact of the samebackground characteristics on corporate performance are not the same, each industryhas its own characteristics.Through this study, we made some useful recommendation:firstly, the incentivemechanism is imperfect in some industries, they need to take further measures toimprove; When companies reward executives, they need to combine thecharacteristics of its own, take a method that has a positive impact on corporateperformance. When the two incentives can achieve the same effect, the companies’better choice is the lower costs incentives. Secondly, when company introduce the topmanagement team member, they should consider the background characteristics thathave positive effects, ignoring the characteristics that have no effects, avoidcharacteristics that have the negative effects to establish a effective introductionmechanism.