State-owned Enterprises Senior Management Incentives And Corporate Performance Empirical Research

With the development of knowledge economy, the talents have become the key of the competition among firms. As the core decision-making members, the top executives play a crucial role in the development of firms. The excellent top executives have become the target of fierce rivalry among firms, and the problem of top executive incentive has become the focus of theorists and entrepreneurs. The basic principle of incentive is linking to firm performance. In China's national economy, the state-owned firms have been being dominant, and their multi-level characteristic with commission-agent of property relations has been made the problem of top executive incentive more prominent.On the base of reviewing the empirical research on the relationship between the top executive and firm performance home and abroad, the article studies the relationship between the top executive incentive and firm performance of China's state-owned firms, using statistical description analysis and hypothesis testing analysis. 344 state-owned and state-controlled listed firms are selected as the sample. First, the article inspects the top executive incentive status using the descriptive method; then, it proposes the hypotheses and tests the relationship between the top executive incentive and firm performance using linear regression to inspect the validity of top executive incentive. It studies these from the whole, and by the scale, by area, by industry or by the rate of liabilities. At last, the main conclusions of the research are gained:(1)Overall, the level of the top-three executive annual pay is high, and has a significantly positive relationship. By scale, it is closely related to the firm scale, but, only has a significant effect on firm performance in large firms. By area, it is significantly positive to the degree of economy development, but the effect on firm performance is negative. By industry, it has a significant effect on firm performance in resource-based industry and competition industry. By the rate of liability, it affects firm performance when the rate is more than 20% and not more than 50%.(2)The phenomenon of "zero shares" is serious. The ratio of shares owned by the top executives is very low, and it isn't significantly correlative to firm performance.