The Impact From Executive Compensation To Company’s Growth

Because of that Decisions made by executive effect the development of listed companies, the study of executive incentive has been focused by managerialists and economists, while executive compensation in china has been in a relatively chaotic state all the time. Chinese GEM has listed in the Shenzhen Stock Exchange on October23,2009, as an important complement to the motherboard, the GEM provides financing platform to a large number of high-growth, high-tech enterprise, growth has been taken as a prominent feature of listed company in GEM. It is a significative topic that the effect of executives incentive of listed companies in those emerging market is good or bad and the contribution paid by executives to the company’s growth is great or bit. Empirical analysis the effect of executive compensation to the company’s growth in companies listed on GEM help to improve the pay structure of executives of listed companies and increase the effect of executive compensation incentive.In this paper, at the base of Principal-agent theory, select Chinese companies in GEM in2009-2010as sample object, use descriptive statistical analysis, comparative analysis and regression analysis, to research the impact of executive compensation in Chinese companies listed on GEM to the growth.Empirical Analysis shows that, monetary remuneration of executives in listed companies have a positive impact on company growth in Chinese GEM. The effect of MSR to company’s growth is not significant. Whether the effect of Stock/Income to company’s growth is prominent or not depend on Stock/Income itself. It works in10%-90%for example, weak under10%and become negative when up to90%or more.Therefore, we believe that, the key to increasing the effectiveness of executive compensation incentive of Chinese companies listed on GEM, is to improve monetary remuneration of executives in listed companies and Stock/Income, rather than improve MSR. The contribution of this article is:1, selected Chinese companies in GEM in2009-2010as sample object.2, proposed a new point that divide Stock/Income in to three part for regression analysis to verify hypothesis.