Empirical Research On The Correlation Between The Executive Incentive And Company Performance Of Medium And Small Listed Companies

Since medium and small-sized market launched in May 2004, its scale has been gradually expanded, its growth has accelerated gradually also, its whole operation is good, which plays a active role and reflects its great value in increasing the ability of financing, promoting the adjustment of industrial restructure, building multi-level capital market system and so on. The market has become a new force of the rapid development of China's economic. This study will have important practical value for Medium and Small Listed Companies to establish and perfect the modern enterprise system, improve the environment of corporate governance and use executive incentive systems to promote company performance more efficient.In the process of the development and growth of companies, executives play an increasingly important role, which is regarded as an intangible asset of significant value and a kind of scarce resources. Reasonable incentive system is an effective way to improve company performance and encourage executives to create more value for theirs enterprises. In this paper, we will build a linear regression model to study the relationship between executive incentive and company performance of Medium and Small Listed Companies, using the method of descriptive statistical analysis and empirical analysis.The results are as follows:executive compensation has a significant positive correlation with company performance of the overall of Medium and Small Listed Companies; the proportion of executive ownership has a positive but not significant correlation with company performance; executives compensation has a positive correlation with company performance under different scales, but it is not that the scale is larger, the correlation is stronger; the proportion of executive ownership has a non-significant positive correlation with company performance under different scales; company performance has a significant negative correlation with the asset ratio which measures the ability of repayment of debt; executive compensation has a significant positive correlation with company performance and the proportion of executive ownership has a non-significant positive correlation with company performance in different areas, and there is no differences between the two areas.This paper includes six parts. The followings are the main contents:Part One:Introduction. At first, discuss an abnormal phenomena in the management of executives in listing company and raise the need of studying the issue; then on the basis, clarify the theoretical and practical significance of the research, and explain the way of the research and innovative points of the paper; Finally, define relevant concepts which will be used in the paper,.Part Two:Literature review. Select representative articles in domestic and overseas, review the research method and the results; think of the process of these researches and the designed models to make a good foundation for the further study in research designing and model checking.Part three:Basic theories. Describe theories of incentive for raising research hypotheses from the angle of Management and Economics.Part four: Research design. Design the empirical study based on the analysis of theory, including the theoretical assumptions of the study, data sources and select samples, variable definition and description, model design, which make preparations for carrying out the empirical analysis.Part five:Analyze empirical results. This part is the core of this paper. Firstly, do descriptive analysis of the overall samples, samples of different sizes and areas according to intuitive data; and then, analyze the correlation between variables in order to find out that if there are multi-colinearity problems which will affect the results of the empirical study; Finally, do empirical analysis according to the results of the multiple regression, discuss the relationship between the executives incentives and company performance according to the results of the empirical research, in order to get conclusions which support or oppose the original assumptions; finally, analyze the reasons for different results which are caused by different factors.Part six:Conclusions and Implications. Describe the conclusions briefly; make recommendations according to actual situations; finally, point out limitations of this study and make recommendations for future research.