Proceedings of the 2017 3rd International Conference on Humanities and Social Science Research (ICHSSR 2017)

The Executive Compensation Incentive Effectiveness Research of Listed Company of Beijing

Authors
Wenqi Li, Zengmin Wang, Xiaofan Xu, Yujing Liu
Corresponding Author
Wenqi Li
Available Online May 2017.
DOI
10.2991/ichssr-17.2017.50How to use a DOI?
Keywords
Executive compensation incentive, effectiveness, hysteresis, economic inertia.
Abstract

With the separation of the ownership and management right of modern enterprise, asymmetric information between management and owner leads to the principal-agent contradiction. At present, the monetary compensation incentive and equity compensation incentive are regarded as the most direct and effective means to solve the agency problem, and its incentive effect has become the core of corporate governance, which is widely concerned by academic and practical circles. We take the data of Beijing listed companies from 2011 to 2015 as the sample, and then compared the effectiveness of the two incentive means through the panel analysis while considering the lag effect of incentive measures. We found that the monetary compensation incentive and equity compensation incentive are both related to the performance of listed companies in Beijing, and there is a lag; the effect of monetary compensation incentive decreases as time moved which is more likely to lead executives to make short-term profit behaviors. Then we introduce the lagging indicators of performance into the model to control the economic inertia, and found that the monetary compensation incentive is more effective than the equity compensation incentive means by iteration, which has a more significant impact on the executive behavior.

Copyright
© 2017, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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Volume Title
Proceedings of the 2017 3rd International Conference on Humanities and Social Science Research (ICHSSR 2017)
Series
Advances in Social Science, Education and Humanities Research
Publication Date
May 2017
ISBN
978-94-6252-347-0
ISSN
2352-5398
DOI
10.2991/ichssr-17.2017.50How to use a DOI?
Copyright
© 2017, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

Cite this article

TY  - CONF
AU  - Wenqi Li
AU  - Zengmin Wang
AU  - Xiaofan Xu
AU  - Yujing Liu
PY  - 2017/05
DA  - 2017/05
TI  - The Executive Compensation Incentive Effectiveness Research of Listed Company of Beijing
BT  - Proceedings of the 2017 3rd International Conference on Humanities and Social Science Research (ICHSSR 2017)
PB  - Atlantis Press
SP  - 241
EP  - 251
SN  - 2352-5398
UR  - https://doi.org/10.2991/ichssr-17.2017.50
DO  - 10.2991/ichssr-17.2017.50
ID  - Li2017/05
ER  -