Study On The Relationship Between Executive Compensation Inequity And Company Performance In Private Listed Company

Since 2005,the government mandate in the annual report of listed companies to disclose executive compensation.Every annual report disclosure period,executives of huge compensation with exposure,but also attracted the attention of the community,will lead to a number of listed company executives appear to “resign”.In 2009,the ministry of human resources and social security and so on six departments jointly issued“about further standard,head of the central enterprise salary management guidance”,which is known as “central corporate executives salary limit orders”,to a certain extent regulate the Chinese state-owned listed companies executive compensation inequality,but its adjusting object does not include private listed company executives.And according to statistics,incremental part of the economic development of China private economy occupies 70%-80%,executive compensation inequity of private listed company to the company performance will have what kind of impact?To study the executive compensation inequity of private listed company of relation with the company’s performance,this paper selects 2010-2014 years 5 years of private listed companies as research samples in A-share market of Shanghai and Shenzhen.and depends on the combination of theoretical and empirical analysis of the relationship between the two.general content of this thesis is as follows:firstly,This paper expound on executive compensation inequity respectively from three levels: external inequity of executive compensation,internal inequity of executive compensation,individual inequity of executive compensation.On the basis of existing research and the equity theory,setting up the measurable indicators of external inequity of executive compensation,of internal inequity of executive compensation,of individual inequity of executive compensation.And puts forward the hypothesis of the correlation between the three and the company performance.secondly,In CSMAR database and RESSET database and listed companies announced the annual report collected from 2010 to 2014 year totally 3105 private listed companies’ financial data of A-share market of Shanghai and Shenzhen,Sorting data by industry and year.at last,Descriptive analysis,correlation analysis,regression analysis and regression analysis of cross-sectional data of life 5years panel data respectively on executive compensation inequity of private listed company and company performance relationship by SPSS software.The empirical finding:External inequity of executive compensation in private listed companies isnegatively related to the company performance,and support the behavioral theory;Internal inequity of executive compensation in private listed companies is positively related to the company performance,and support the tournament theory;Individual inequity of executive compensation in private listed companies is positively related to the company performance,and support the tournament theory.