Influence of Executive Compensation Incentives on Enterprise Performance under Different Natures of Property Rights
DOI:
https://doi.org/10.54691/bcpbm.v23i.1502Keywords:
Executive compensation incentives; enterprise performance; SOEs; Non-SOEs.Abstract
No unified understanding has been formed in the academic circles of the fact that executive compensation incentive is an important means to improve enterprise performance, and executive compensation differs in the effects on enterprise performance for the enterprises with different natures of property rights. In this paper this issue is further analyzed using empirical analysis method, based on the selected data concerning the A-share companies listed in both Shanghai and Shenzhen stock markets during 2010-2020. Research demonstrates the impact of executive compensation on enterprise performance, and the enhancement role of executive compensation incentive in improving enterprise performance. The role differs under different property right systems. In terms of enterprise performance improvement, executive compensation has a significant positive effect on the non-state-owned enterprises (Non-SOEs), and a significant negative effect on state-owned enterprises (SOEs). Based on the research results, this paper proposes to improve the arrangement of enterprise compensation system, deepen the reform of compensation system in SOEs, enhance the level of marketization of enterprises, eradicate the mechanism barriers, strengthen the internal management of executives, and bring into full play of the executive compensation incentives in promoting enterprise performance.
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