Research On The Relationship Between Executive Incentive, Board Characteristics And Private Listing Corporate Performance

As a product of the common development of private economy and capitalsecurities market, private listed companies play more and more important role in ourcountry’s economy, the corporate performance of private listed companies is receivingmore and more attention. The role of the board of directors and senior managers inprivate listing Corporation internal governance mechanism which is played inimproving the corporate performance, has become a hot issue for many scholars.Scholars generally analyzed this problem from the aspects the executive incentiveeffectiveness and the role of board characteristics in improving the corporateperformance both by theoretical and empirical study, but has not yet come to a unifiedconclusion.This paper selected2006-2012annual report data of245listed companies whichhave completed the privatization before the end of2005as samples, using correlationanalysis, multiple linear regression analysis of quantitative research methods, toinvestigate the relationship between private listing corporate performance andexecutives incentive&board characteristics. In this study, executive incentiveincluding executive compensation and executives shareholding ratio two variables;board characteristics including board size, board meetings, board independence, boardincentive characteristics and leadership structure, among this, board incentivecharacteristics including the board of directors executive compensation andshareholding ratio two variables; using ROE, EPS, Tobin’s Q three indexes to measurethe performance of the company; Multiple linear regression analysis showed that thereis a significant positive correlation between executive compensation, directors’remuneration and corporate performance; there is an inverted U-shaped curverelationship between top executives shares, board of directors shareholding andcorporate performance; In some years board size had a negative correlation with someperformance indexes, in most cases, board size had no significant correlation withperformance scale; Both the number of board meetings and the proportion of independent directors did not play a significant role in improving the performance ofthe company; Panel data regression results show that in the case of separation of thetwo roles ROE and EPS performing better; In addition, the study found that in thesame year there are certain differences between board characteristics and the differentperformance indexes, and the relationship has some differences between the sameperformance index and board characteristics in different years.Overall, executives and directors incentive of private listed companies plays apositive role in promoting corporate performance, the relationship between othercharacteristics of board and corporate performance is not significant, For private listedcompany’s board governance inefficiencies, this paper proposes a series of policies toimprove the efficiency of board governance, hoping to take this as a theoretical basisfor private listing Corporation board governance and finally to improve theperformance of private listing Corporation.