| Most of companies on the small and medium enterprise board listed company are newlisted companies. They have burning desire about expanding capital stock. Extensive capitalexpanding will makes non-effective investing increased. While on the condition of firmperformance declined, the senior-manager compensation has increased dramatically. Theunscientific compensation mechanism will directly affect corporate governance, and it willmake the company lack of the ability to steady-state growth of performance. About theresearch on the impact of senior-manager compensation upon firm performance, this articleuses small and medium enterprise board listed companies’ financial statement data, and findmany problems, for example, the small and medium enterprise board listed companies have asignificant performance difference in recent years, senior-manager compensation can’t linktogether firm performance. This paper puts forward targeted proposal that is beneficial toimprove the listed company compensation mechanism to perfect the listed company. At thesame time these proposals can improve corporate governance, promote the company’sperformance rising steadily.This paper increases the senior-manager shareholding index to represent the level ofsenior-manager compensation that the level can be more in line with the actual situation.Previous research literatures just use monetary compensation on behalf of thesenior-manager compensation, because the non-monetary compensation is often difficult toobtain and measure. This neglected the non-monetary factors. In addition, from the point ofthe present study, few scholar uses of small and medium enterprise board listed companiessample data to study the impact of senior-manager compensation upon firm performance,this paper expands the research field.This paper analyzes the basic theory of monetary compensation and firm performancethrough the principal-agent theory and human capital theory. In the meantime, it analyzes thebasic theory of senior-manager shareholding and firm performance through the incentivetheory. It puts forward the senior-manager monetary compensation and firm performance hasa positive correlation, and the senior-manager shareholding and firm performance has a positive correlation too. These are two research hypotheses. Secondly this paper analyzes thesituation of senior-manager compensation and firm performance on small and mediumenterprise board listed company in our country, and contrasted with the situation of the mainboard listed companies. Finally, this paper through descriptive statistics to draw our countrysenior-manager compensation and firm performance level on small and medium enterpriseboard listed company increasing year by year. With ROE and Tobin Q value as the firmperformance indicators respectively, this research uses the same design model to validate theconclusion of basic consistent, and they can support each other. But the correlation degree isdifferent between the senior-manager compensation’s two indexes and the firm performance,as shown in the following:(1) senior-manager monetary compensation and firm performancewas significantly positive correlation.(2) senior-manager shareholding and firmperformance is positively related, but not dramatically. These conclusions test and verify thehypothesis proposed in this paper.Using above capital market data empirically, this paper puts forward to a series of policyproposals that aiming at the problems of small and medium enterprise board listed company,for example, establishing the professional manager market, perfecting the compensationincentive mechanism, and strengthening the internal and external supervision mechanism.And it provides suggestions for corporate governance reform, and makes for stabledevelopment of small and medium enterprise board listed company. |
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