An Empirical Study On Relationship Between Executive Incentive And Corporate Performance

In the situations of economic globalization, especially in the aftermath of the financial crisis, the problems about the impact on corporate performance which comes from executive incentive or what kind of incentive combinations can be able to stimulate the power of managers have become the new attention to the experts and scholars.Senior managers are the significant human capital of the corporate, and are the decision-makers of all operational activities of the company to lead and support the company’s operational activities carried out and the upgrade of the company’s operational capabilities, and also can arrange a variety of resources effectively both inside and outside the company to achieve the objectives.So what incentive combinations should be established do influence the corporate performance. Thus, choosing the empirical study on relationship between executive incentive and corporate performance from the data of the listed company has an important theoretical value and practical significance.In this paper, we make use of the normative and empirical research methods to study the relationship between executive incentives and company performance on the basis of existing research.First, classifying summary of related literature, two kind of incentives mechanism are obtained:long-term incentives mechanism and short-term incentives mechanism. Shareholding incentive and spirit incentive are included in the long-term. Wages and company-paid consumption are included in the short-term.Secondly, make the descriptive statistical analysis and correlation analysis on senior managers’wages, shareholding quantity and company-paid consumption. What’s more, we use ordinary linear regression to analyze the relationship between executive incentives and company performance for147listed company. The empirical results show that:it’s a significant positive correlation between the per salary of the executive and company performance; it’s a significant negative correlation between the proportion of salaried executives, company-paid consumption and corporate performance; the proportion of managerial ownership and corporate performance does not exist a significant correlation.Finally, on the basis of theoretical analysis and empirical analysis, we will mention countermeasures recommendations to improve company performance for the listed company.