Executive Incentive and Enterprise Performance: An Empirical Research Based on China’s Internet Listed Enterprises

Abstract

The study on the relationship between executive equity and compensation incentives and enterprise performance is a hot issue in corporate governance. But in the past, most of the research was based on traditional enterprises, and few of the research on Internet enterprises. This paper takes the Internet companies listed in Shanghai and Shenzhen stock markets from 2010 to 2016 as a sample, and verifies the relationship between the executive stock incentive, compensation level and corporate performance by constructing the empirical models. It is found that the increase of the proportion of senior executives in Chinese Internet enterprises can improve the financial performance of enterprises, but it has nothing to do with the market performance; and the increase of executive compensation level can improve the financial performance of enterprises, but it will inhibit the market performance. The innovation of this paper is embodied in taking Internet enterprises as the research object, and puts forward some targeted suggestions.