Executive Compensation And Corporate Performance Relationship

In the enterprise management activities, shareholders or board of directors don’t have unified or clear theoretical guidance to the executive pay, the behavioris is uncertainty. This is derived from the perception of an important matter, that is, the relationship between executive pay and corporate performance. Generally speaking, business owners will be based on the level of development of the industry, the level of social economy, business benefits to develop executive pay. However, after the establishment of the salary,it is too high or too low, whether it can have a positive impact on the performance of the enterprise, there is an uncertain view. In the modern enterprise management theory, principal-agent theory has been widely recognized and utilized,namely when the enterprise owners ask agent to exercise the right of corporate governance, they must pay a certain cost, also it have certain uncontrollable. This paper analyzes the current status of executive compensation and corporate performance, and discusses the relationship between executive compensation and corporate performance, even from the theoretical and practical data. Through theoretical analysis and empirical research, the relationship between executive compensation and corporate performance is reasonably explained and the corresponding conclusions are drawn.In the research, this paper selects morethan 6000 data samples of our country’s listing Corporation. Through the data of two major categories of state-owned and non state-owned companies, we analyze the general distribution of the company’s net assets, the proportion of the executive’s stock in company, the company’s size, the size of the company and the growth of the company. At the same time, this paper set up two empirical models for the relationship between executive compensation and corporate performance, and put forward four theoretical hypotheses, using statistical software to carry out regression analysis.The main conclusions are as follows: first, executive compensation and corporate performance are positively related, The promotion of executive pay to corporate performance in state-owned enterprises is more obvious than the non state-owned enterprises. Second, the proportion of the executive’s stock in company and company performance is positively related,and the promotion of the executive’s stock to company performance in state-owned enterprises is more obvious than the non state-owned enterprises. Third, compared to state-owned enterprises, the size of the company’s performance impact on the company’s performance is greater in non state-owned. Fourth,the impact of enterprise growth on corporate performance is not obvious in the state-owned enterprises and the non state-owned enterprises.