Enterprise Internal Control,Financial Performance And Executive Compensation

The financial crisis broke out in 2008 has a great impact on the development of listed enterprises in our country,and then the "high-price compensation" events emerge constantly,which makes the executive compensation of enterprises gradually become the focus of attention,and has aroused the attention of the government.According to the related literature,in order to improve the financial performance of the enterprise,the client will sign the "salary-performance" contract with the executive.Therefore,in order to gain more self-interest,executives will actively improve their financial performance to achieve.At the same time,good internal control of enterprise executives business and decision-making behavior of strict control,to avoid damage to the financial performance behavior,and good internal control can also influence the relationship between executive compensation and financial performance.This paper intends to explore the influence mechanism of executive compensation and internal control on financial performance,so as to encourage enterprises to integrate internal control system and reasonable salary system into corporate governance.This paper adopts the research method of normative analysis and empirical analysis,and introduces intermediary variable internal control to study the impact path of executive compensation on financial performance.Based on the information asymmetry theory and the principal-agent theory,three research hypotheses are put forward on the basis of the combing of the three concepts and research literature at home and abroad.In this paper,the internal control of listed companies China index as a measure of internal control,executive compensation and financial performance were selected net profit and total assets of the top three executives total compensation measure rate of ROA.Based on the theoretical analysis and empirical needs,we selected sample data from A share listed companies in China for 2010-2016 years as the research object,and constructed empirical models by stepwise regression analysis.This paper draws the following conclusions:first,the increase of executives' compensation,has significant effect on financial performance;second,the executive compensation of the company,have a positive impact on improving the internal control system of enterprise internal control;third,more effective,more can make executives actively improve the financial performance of the enterprise level,does not exist complete mediating effect between executive compensation and financial performance of internal control.