Empirical Analysis On The Endogenous Relationship Between Executive Incentive Mechanism And Performance

Ownership and operation separate governance structures are widespread in the modern company, there are asymmetric information and different goal phenomenon between owners and operators; cause a series of problems such as moral hazard, adverse selection. How to realize the maximization of the value of the company and meet operators’interests is become a hot topic in the corporate governance.How on the premise of constraint operator, also can motivate operators to create more value for company? Effective incentive mechanism is effective method. With the appropriate incentive mechanism, can motivate managers to work hard and create value.In this paper, we use the domestic and foreign related research about corporate governance, executive incentive, based on the "entrust-agent" theory, combined with the related data of the listed company of Shaanxi province, study the endogenous between executive incentive mechanism and enterprise performance, analysis their status and existing problems, through the analysis of the related theory research put forward hypothesis, by building regression model, combined with the data and use Eviews software to deal with model analysis. In the empirical analysis of executive factors, enterprise performance, enterprise scale and the first big shareholder shareholding have the positive correlation relationship with executive incentive; the social and legal person share, equity concentration have the negative correlation relationship with executive incentive. In the empirical analysis of enterprise performance, executive pay, enterprise scale and equity concentration have the positive correlation relationship with enterprise performance, through the results we have the obtained modified regression model. Based on the modified model, using two-stage least squares couplet set of equations, found the interpretation of regression equation ability is higher than the single one, and the statistically significant; compare the endogenous and the no endogenous results, the single equation model underestimate the relationship of executive incentive and enterprise performance. Through the study, Shaanxi province listed companies can from executive pay, executive equity incentive and corporate governance structure improve the enterprise performance.