Environmental Investment Efficiency, Executive Incentives And Corporate Financial Performance

As the economy has entered a stage of high-quality development,the conflict between environmental benefits and economic benefits has intensified.The increasing pressure to reduce emissions has brought new challenges to companies.According to the concept of environmental fiduciary responsibility,heavily polluting companies have caused more damage to the environment and should undertake more environmental protection tasks.Capital is profit-seeking,but the controller of capital should have a sense of social responsibility.Based on the theory of social responsibility,the goal of an enterprise is not only to bring economic benefits to the enterprise and meet the requirements of relevant stakeholders,but also to assume corresponding social and environmental responsibilities.Investing in environmental protection can effectively improve the ecological environment,and companies should invest in environmental protection to avoid additional punishment costs.The efficiency of environmental protection investment can reflect the economic effects brought about by the environmental protection investment behavior of enterprises,and it is very important to study the efficiency of environmental protection investment.Based on the theory of information asymmetry,the shareholders' meeting provides incentives based on the manager's effort.So,how will the incentive system affect financial performance? This is of great significance to the establishment of an incentive system for enterprises.This article explores these issues in depth.Taking the listed companies in China's heavy pollution industries as the research object,selecting various financial data of A-share heavy pollution companies from2015 to 2019 as samples,using the super-efficiency DEA model to measure the environmental protection investment efficiency of these companies,and using long-term and short-term financial performance as an explanation Variables,including short-term financial performance obtained through principal component analysis and entropy method,empirical analysis of the impact of environmental protection investment efficiency on financial performance,and then introduce two important factors of corporate governance,executive compensation incentives and equity incentives as adjustment variables The model also takes into account the heterogeneity of enterprises,so as to explore the value creation mechanism of enterprises to fulfill environmental protection responsibilities and executive incentives.The research results show that:(1)Environmental investment efficiency has a significant positive effect on long-term and short-term financial performance;(2)Executive compensation incentives can have a positive effect on the value creation of enterprises in the short-term,and at the same time,in the long-term Financial performance plays a positive role;equity incentives have no significant impact on short-term financial performance,and the impact on long-term financial performance is significantly positive;(3)Executive compensation incentives and equity incentives are both on the relationship between environmental protection investment and short-term financial performance Produced a positive adjustment effect,and produced a positive adjustment effect between environmental protection investment and long-term financial performance.Therefore,the following policy recommendations are put forward:(1)Establish a diversified and co-governance environmental governance system;(2)Strengthen the disclosure of the scale of environmental protection investment by enterprises;(3)Enterprises should set a reasonable level of executive compensation;(4)Increase equity incentives Level and consider the applicability of equity incentives.