Empirical Study On Executive Compensation,internal Control Quality And Firm Performance

With the rapid development of economic globalization and knowledge economy,human resources are playing an increasingly important role as the source of competitiveness.The competition of enterprises is also the competition of talents.How to attract,motivate and retain talent is an eternal subject of the management of enterprises.Among them,SALARY management is an important factor influencing enterprise talent management.At the same time,senior management personnel are important management decision-making management of the company.Therefore,the issue of executive compensation of listed companies has also received wide attention from all walks of life.A well-designed executive compensation system can reduce the agency coSTS caused by information asymmetry,make the company's owner and manager's goals more consistent,and solve the “lemon problem” to achieve a win-win situation.The relationship between high-pay compensation and corporate performance is also a good basis for establishing a scientific and reasonable remuneration system.And then,internal control is an important part of China's modern enterprise construction and can help companies avoid risks,enhance information transparency,and ensure the reliability of financial accounting reports.Enterprises in the context of legal and compliance management to ensure efficient and high-efficiency sustainable operations are one of the goals of internal control.The above goals can be achieved only if the manager and the owner pursue the same intereSTS.This coincides with the design of an effective compensation incentive system.Therefore,how to use the internal control mechanism to ensure that the executive compensation incentive plan effectively plays its role to enhance the company's performance has become a problem that needs to be solved urgently.Based on above assumption,this paper adopts a combination of normative and empirical research methods.Firstly,reviewing and commenting on relevant literature that based on a brief explanation of related theories and regarding internal control as an intermediary variable,and then using Shanghai A-Share and Shenzhen A-share except financial enterprises from year 2013-2016 as research samples.Defining related concepts and measuring selected variables,using SPSS software to perform regression analysis on the constructed model.The conclusions are as follows:(1)The higher the company's executive compensation level,the more it can improve the quality of its internal control,and there is a significant positive correlation between executive compensation and internal control quality.(2)There are significant positive correlation among internal control quality,executive compensation and the performance of enterprises.(3)The effect of executive compensation on business performance is partly achieved through improving the quality of internal control.That is,the quality of internal control has some intermediary effects in the influence of executive compensation on business performance.Finally,this article summarizes the research findings and from the reality of our country,put forward some suggestions in establishing a reasonable system of executive compensation and effective internal control.