Senior executives of listed companies in China pay efficiency literature review

The significance of the compensation design institutional arrangements by senior executives the ability to effectively lead to the development of good corporate behavior up. Different salaries constitute corporate executives have different incentives, so the remuneration packages of senior executives will result in different behavior of different choices, thereby affecting the implementation of business performance following is abroad on the impact of executive compensation on company performance Research:
First, the executives of the relationship between pay and corporate performance
1 executive remuneration and corporate performance are related
Cleveland High and Smead (Coughlan & Schmidt, 1985) between 1978-1982 according to data from 149 companies, empirical studies have found that changes in compensation and stock prices are related, they also provide the first evidence that the poor performance of the company is more likely to replace CEO .

Hall and Lieberman (Hall & liebman, 1998) using the United States hundreds of public float of the largest commercial companies 1980-1994 in the 15 years of data, through empirical Research operator compensation and corporate performance characteristics associated with a strong conclusion , and that the operator compensation structure increases the proportion of stock options, allowing operators to pay and corporate performance correlation increased significantly.

Yang Qing, Gao Ming (2009 listed companies in China for 2005-2007, using the sample pool of data, through the mixed regression, fixed effects regression and sensitivity analysis, empirical testing found that our directors and CEO compensation incentives tied to company performance have been preliminary, but Researchers CEO reveals the director of performance incentives encourage walking in front of prominent directors of the problem of inadequate incentives Further Research found that CEO pay listed companies positively associated with performance of the company, remuneration of directors of the company's performance had not significantly affected.

(2) executive compensation and corporate performance is not significantly related
Li Zengquan (2000) use financial data for the year 1998, the use of grouped regression model tested, the study found managers of listed companies in China's annual compensation and corporate performance are unrelated, and asset size, industry, the proportion of state shares and companies are not the areas where the company performance and the correlation between executive pay have any effect.

Li Liangzhi, Xia Liang (2006) from 2001 to 2003 listed companies in 31 electronics industry panel data for empirical analysis, concluded that executives of listed companies of electronic industry's annual compensation and corporate performance indicators are mostly positive correlation does not exist, but with the size of the company executive compensation has a significant positive correlation.

Zhanhao Yong, Feng Jinli (2008) by country from 2004 to 2006, 192 listed companies in high-tech industry, empirical analysis of panel data, found that annual monetary remuneration of executives and company performance (ROE) were not significantly correlated with the Company size was significantly positively correlated.

Second, the executive remuneration and other factors, the relationship between corporate performance
Milan (Mehran, 1995) using 1979 to 1980 of 153 randomly selected manufacturing companies to get the data of the manager's compensation structure, ownership and company performance relationship in which performance of the company with the return on assets and Tobin's Q, said that: two kinds of company performance and the proportion of shares held by managers are related to the company manager stock-based compensation and the proportion of total remuneration is related to growth opportunities, financial leverage, business risk, company size and other factors with the manager without a reward structure significantly correlated.

Lin Chun-Qing (2003), the company's executive team members within the pay gap and the relationship between the company's future performance tests confirmed a positive relationship between the two, indicating that the results support the theory instead of tournament behavior theory. In fact, forensic analysis also that affect our pay gap is not a major factor in the company and the external market environment factors on the operations of their own characteristics, but the corporate governance structure of the defects.

Hu Yang (2006) from the enterprise financial control system design point of view of listed company shares held by the issue of an empirical study, found that the operator holding and operating the amount of annual salary ratio is a measure of the amount of excitation holding a valid indicator of strength, the indicators and stock returns a positive linear correlation between the accounting profit targets with no positive correlation.

Liu Wisdom (2009 to 2001-2005 data for the sample of Chinese listed companies, executive compensation and earnings management of the relationship between an empirical study found that: (a Chinese listed companies and accounting profit executive salary was significant between positive correlation between executives use accounting methods to increase reported profits increased bonus compensation, after controlling for operating cash flow, non-manipulation of accruals, the manipulation of accruals on an annual salary of executives is still significant, (2 despite the extraordinary gains and losses are often used to adjust the profit executives, however, the role of executive salary is not significant, (3 motivation for earnings management of listed companies with executive salary and the reported profits of strengthening and enhancing the relevance.

Based on executive pay and corporate performance relationship, a more comprehensive study abroad for the effect of executive compensation, foreign literature did not reach a consensus, but the general executive pay and company performance is relevant, positive market response to its , hold a positive attitude, which is our implementation of this system has a very important significance, but because of its object of study is not our business, study abroad than the domestic capital market in which it is relatively mature, the internal governance structure more complete, the legal system are also significant differences in the environment, foreign scholars have come to the conclusion applied to the effects of our executive compensation practice there are some limitations. Links to free download http://www.hi138. com
Domestic for remuneration of senior executives of the effect of study focused on the performance of the company's dependency on the more commonly used measure of performance indicators is the ROE, ROA, Tobin's Q, etc., and concluded there are also big differences. Because: (1 study different period, China's capital market, the legal system background, the Economic environment has been changing, and study the methods used failed to take into account all the environmental variables; (2 data from different sources, inconsistent samples (3 different empirical methods . Some linear regression, some non-linear regression, there is a piecewise linear regression, some single equation, some simultaneous equations. (4 indicators selected issues. ROE are vulnerable to manipulation, Tobin's Q in our existing capital markets conditions are not suitable for the use of different scholars on different indicators selected come to different conclusions.

In summary, our study was not thorough enough, as the system of executive compensation practice in China, academic should have further explored.


References:
[1] Mehran.H. Executive compensation structure, ownership and firm performance [J]. Journal of Financial Economics. 1995 (38)
[2] Yang Qing, Gao Ming: directors' remuneration, CEO pay and company performance - conspiracy or common incentives. Financial Research [J]. 2009 (6)
[3] Liu wisdom: a listed company executive compensation and earnings management empirical analysis. Economic Research Guide [J]. 2009 (19) Links to free download http://www.hi138.com