Research On The Impact Of Executive Compensation On Corporate Social Responsibility And Financial Performance

Since the reform and opening up,China's economic development has achieved remarkable results.The rapidity of the economy is accompanied by the emergence of new social problems.Enterprises are the most dynamic part of society and economy.In the process of sustainable development,enterprises must consider not only their own interests,but also the interests of company shareholders,creditors,employees and other stakeholders.However,in recent years,some companies have been exposed by social media for failing to fulfill their social responsibilities.These exposure events will not only affect the production and operation of the enterprise,but also damage the good social image that the enterprise has established,and have an impact on the sustainable development of the enterprise.Because the performance of social responsibility often requires companies to pay realistic costs,it will affect the profitability of the company,which may affect the compensation of executives.From the perspective of decision-making and implementation,the behavior of an enterprise(including the performance of its social responsibility)often depends on the awareness and actions of its executives.Therefore,this study focuses on the relationship between corporate social responsibility,corporate financial performance,and executive compensation.This article uses data from China's A-share listed companies from 2014 to 2018,and uses multiple regression methods to study the relationship between executive compensation,corporate social responsibility and financial performance.The research results show that:(1)There is an inverted U-shaped relationship between corporate social responsibility and financial performance.Using the theory of stakeholder and the law of diminishing marginal returns in microeconomics,this article explores and analyzes the reasons for the formation of the inverted U-shaped relationship mainly because different stakeholders have different choices to avoid risks and the economics of diminishing marginal returns.Laws;(2)executive monetary compensation and executive shareholding will positively affect corporate financial performance,showing that improving the corporate executive compensation mechanism has a positive impact on the improvement of corporate financial performance;(3)executive monetary compensation and high The proportion of management and shareholding is positively regulating the relationship between corporate social responsibility and financial performance.When corporate social responsibility investment resources are within a certain range,increasing corporate social responsibility investment levels will also increase corporate financial performance,and executives' monetary compensation and executive shareholding ratios will positively affect this relationship.The possible innovations of this research are:(1)The relationship between corporate social responsibility and financial performance is studied from the perspective of executive compensation,and the research perspective is relatively new;(2)The research results show that both the monetary compensation of executives and the shareholding ratio of executives It has a positive adjustment effect on the relationship between the fulfillment of corporate social responsibility and financial performance,and can be used as a consideration factor for corporate social responsibility and executive compensation decisions.(3)This article uses the social contribution value per share to measure the corporate social responsibility index,and the innovation of the social responsibility index measurement perspective.