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

Based on the panel data of Chinese listed companies in the information technology industry from 2007 to 2018, this paper uses a fixed-effect model to study the relationship between corporate performance expectation gap and strategic change and analyzes the moderating effect of private benefits of management control and equity incentive. It is found that the greater the gap between corporate performance expectations is, the lower the frequency of corporate mergers and acquisitions is, and the higher the frequency of corporate asset divestment is. Further research finds that private benefits of management control weaken the positive correlation between corporate performance expectation gap and asset stripping frequency. Equity incentive strengthens the negative correlation between corporate performance expectation gap and corporate mergers and acquisitions frequency, and the positive correlation between corporate performance expectation gap and corporate asset stripping frequency. Based on this, when enterprises carry out strategic change, enterprises should choose the direction of strategic change according to the degree of performance expectation gap, and promote the effective realization of strategic change by improving the governance of the board of directors and optimizing the management incentive mechanism.

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Empirical Analysis on the Relation Between Capital Structure and Corporate Performance of Listed Companies in SME Boards in China

Proceedings of the Eighth International Conference on Management Science and Engineering Management - Advances in Intelligent Systems and Computing ◽

10.1007/978-3-642-55122-2_91 ◽

2014 ◽

pp. 1049-1058

Author(s):

Chaojin Xiang ◽

Xiaofeng Wu ◽

Aoyang Miao

Keyword(s):

Capital Structure ◽

Empirical Analysis ◽

Corporate Performance ◽

Listed Companies

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An Empirical Analysis on the Relationship between Ownership Structure and Corporate Performance of Liquor Listed Companies

Proceedings of the 2016 6th International Conference on Mechatronics, Computer and Education Informationization (MCEI 2016) ◽

10.2991/mcei-16.2016.297 ◽

2016 ◽

Author(s):

Yang Gao ◽

Zhaoxia Yin ◽

Ye Lyu ◽

Pengchun Hu

Keyword(s):

Empirical Analysis ◽

Ownership Structure ◽

Corporate Performance ◽

Listed Companies ◽

The Relationship

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Financial Policy and Corporate Performance: An Empirical Analysis of Nigerian Listed Companies

International Journal of Economics and Finance ◽

10.5539/ijef.v4n4p175 ◽

2012 ◽

Vol 4 (4) ◽

Cited By ~ 1

Author(s):

Rafiu Oyesola SALAWU ◽

Taiwo Olufemi ASAOLU ◽

Dauda Olalekan YINUSA

Keyword(s):

Empirical Analysis ◽

Corporate Performance ◽

Listed Companies ◽

Financial Policy

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How do executive pay and its gap with employee pay influence corporate performance? Evidence from Thailand tourism listed companies

Journal of Hospitality and Tourism Insights ◽

10.1108/jhti-03-2021-0061 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Laurence Ferry ◽

Guanming He ◽

Chang Yang

Keyword(s):

Regression Analysis ◽

Firm Performance ◽

Executive Compensation ◽

Corporate Performance ◽

Listed Companies ◽

Executive Pay ◽

Short Term ◽

Pay Gap ◽

Content Type ◽

The Impact

PurposeThe authors investigate how executive pay and its gap with employee pay influence the performance of Thailand tourism listed companies.Design/methodology/approachThe authors manually collect data on the executives' and employees' remunerations for Thailand tourism listed companies and use the data for the authors’ OLS regression analysis. To check the robustness of the results to potential endogeneity issues, the authors employ the two-stage least-squares regression analysis and the impact threshold for a confounding variable approach.FindingsThe authors find that short-term executive compensation enhances firm performance, and that long-term executive compensation reduces the likelihood of unfavorable corporate performance. The authors also find that the gap in short-term pay between executives and employees has an inverted-U relation with firm performance.Research limitations/implicationsThis study suggests that higher executive pay relative to employee pay could encourage executives to work hard to improve corporate performance, but that too large a pay gap between executives and employees could impair employees' morale and harm firm performance.Practical implicationsIt is important for tourism companies to not only pay executives well but also avoid too large a pay gap between executives and employees.Social implicationsThis study implies the important role of compensation design in contributing to employee engagement and good performance for tourism firms.Originality/valueThis study sheds light on agency problems between executives and employees in tourism companies and provides new evidence and insights on compensation research in the tourism sector in emerging markets.

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