An Empirical Study on the Compensation Gap and the Performance of the Company in a State – Owned Listed Company

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Project Title: An Empirical Study on the Compensation Gap and the Performance of the Company in a State – Owned Listed Company
Author: Li Jiarui
Advisor: Ass. Prof. Ching-Fang Chi
Degree: Master of Business Administration
Major: International Master of Business Administration
Faculty: Graduate Schools
Academic year: 2017

Citation

Li, Jiarui. (2017). An empirical study on the compensation gap and the performance of the company in a state – Owned listed company. (Master’s independent study). Bangkok: Siam University.


Abstract

Along with the development of social economy, the concept of management, the methods of management, and the corresponding modes of management, along with the development and progress of human practice, and present a very obvious trend of the times, with the constant development of knowledge economy, the traditional economy and the Internet are combined. Along with the development of economy and Internet communication technology, the combination of traditional industry and Internet industry has produced “Internet + “. The concept of knowledge, subversion of many traditional concepts, knowledge elements in the adjustment of the industrial structure to the rationalization direction adjustment, promote the rapid upgrading and development of technology will still play a key role. Compared with more than a decade ago, the current economic and social development of human society in accelerating to the knowledge industry stage transition, and in the enterprise management theory and management method research more reviews, also inevitably will bring profound effect. The competition of modern enterprises is largely reflected in the competition of talent, after all, all the activities of the enterprise depend on people to complete, and human resources are precious resource in all the resources of the enterprise. However, in many cases, the goal of the enterprise’s pursuit and the goal of personal development are not exactly the same, so what method is used to achieve the goal of achieving both the incentive and the rapid progress of the enterprise is precious. The heated discussion about the pay of executive pay of state – owned enterprises has made the pay issue of domestic senior management become the concern of society as a whole. Not only theorists are concerned, but entrepreneurs are also actively looking for solutions. One of the core issues of entrusted agency theory is the design incentive scheme to avoid the generation of agent problem, and the most important aspect of the incentive plan is the design of the compensation system. The research on the remuneration gap and the company’s performance relationship can provide reasonable suggestions for the establishment of a reasonable executive compensation system for enterprises.

The correlation coefficient between the return of the net assets of the listed company’s financial performance indicator and the remuneration margin of the senior management, the company’s growth, the assets and the proportion of the top 10 sharehol,ders are positive and positive correlation. The correlation coefficient between the earnings per share and the asset – liability ratio is negative The correlation between earnings per share and the remuneration margin of executive compensation, company’s growth, assets and the proportion of the top 10 sharehol, ders are positive and positive correlation. The correlation coefficient between earnings per share and asset – liability ratio is negative The number indicates a significant negative correlation. It illustrates the positive correlation between the enterprise performance index and the pay gap between executives.

It can be seen from the regression result that the remuneration margin of the senior management, the company’s growth, the assets can have a significant positive impact on the return on the net assets of the listed company’s financial performance indicator, and the asset – liability ratio has a significant negative impact on the return of net assets ;Products can have a significant positive impact on earnings per share in the performance indicators of state – owned listed companies, and the asset – liability ratio has a significant negative impact on earnings per share. The higher the pay gap, the higher the company’s net assets and earnings per share.

Keywords: State-owned listed Enterprises, executive pay gap, enterprise performance.


An empirical study on the compensation gap and the performance of the company in a state – Owned listed company

International Master in Business Administration (IMBA), Siam University, Bangkok, Thailand

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