Research on the Influence of Executive Compensation Incentive on Corporate Financial Performance under the Multiple Regulation of Corporate Governance

Abstract

. There are different opinions on the relationship between executive compensation incentive and corporate financial performance, and this paper explores the relationship between them from the perspective of corporate governance using unbalanced panel data of 1,816 manufacturing listed companies in Shanghai and Shenzhen A-shares in China from 2015-2019 as a sample, using a hierarchical regression approach. The results show that executive compensation incentive has a positive impact on corporate financial performance. The independence of the board of directors in corporate governance negatively regulates the relationship between executive compensation incentive and corporate financial performance. The size of the board of directors and executive equity in corporate governance positively regulate the relationship between executive compensation incentive and corporate financial performance. The combination of the three in corporate governance negatively regulates the relationship between executive compensation incentive and corporate financial performance. Finally, from the perspective of corporate governance, this paper puts forward policy suggestions to the relevant management departments of enterprises, and provides practical guidance for them to improve their financial performance.