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Correlations between Executive Pay, Equity Incentive and Corporate Performance: Empirical Analysis Based on Panel Data of China¡¯s Listed Companies

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  • Huiguan Ding
  • Jiansheng Cai
  • Yanxia Niu

Abstract

The global recession triggered by the subprime mortgage crisis in 2009 has aroused reflections over executive pay system. Domestic and foreign theorists have not yet reached a unanimous conclusion in their research on relationship between executive compensation incentives and corporate performance, especially correlations between executive pay and executive shareholding ratio and equity concentration degree. There also exist large differences in the empirical results. This paper, on the basis of reviewing the previous research results, takes component stocks of Shanghai 180 and Shenzhen 100 indices during 2007-2009 as samples and tests the correlations between executive pay, equity incentive and corporate performance of China¡¯s listed companies through multiple regression analysis, which is of great significance to direct the practices in executive compensation system reform of China.

Suggested Citation

  • Huiguan Ding & Jiansheng Cai & Yanxia Niu, 2012. "Correlations between Executive Pay, Equity Incentive and Corporate Performance: Empirical Analysis Based on Panel Data of China¡¯s Listed Companies," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 3(3), pages 24-31, July.
    • Handle: RePEc:jfr:ijfr11:v:3:y:2012:i:3:p:24-31
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    Cited by:

    1. Lu Tang & Shihan Zhang & Chenhui Ding & Jinyao Huan, 2022. "How Can the Sustainable Motivational Effect of Equity Incentives on Corporate Performance Be Exploited?—A Study Based on the Moderating Effect of Aspiration Level," Sustainability, MDPI, vol. 14(24), pages 1-17, December.
    2. Antonio Pedro Soares Pinto & Mario Gomes Augusto, 2014. "Are There Non-linear Effects of Banking Relationships and Ownership Concentration on Operational Performance? Empirical Evidence from Portuguese SMEs Using Cross-section Analysis and Panel Data," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 5(4), pages 67-84, October.
    3. Jiafeng Gu, 2023. "Firm Performance and Corporate Social Responsibility: Spatial Context and Effect Mechanism," SAGE Open, , vol. 13(1), pages 21582440231, January.

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