THE EXECUTIVE COMPENSATION STRUCTURE AND COMPANY PERFORMANCE IN CHINA’S RETAIL AND AUTOMOBILE INDUSTRY

Abstract

The executive compensation only accounts for a relatively small part of thecompany's value among China's listed companies, however, executive compensationstructures may impose a significant impact on company performance. Therefore, this paper aims to study how the executive compensation structure can influence the company performance of China retailing industry as well as automobile industry. This thesis cites the companies from two industries including the retailing industry and the automobile industry, which are listed on the Shanghai and Shenzhen exchanging stock market in China. All data were collected from the CSMAR database and relatedcompanies' annual reports and official website. After the analysis and calculation of data on SPSS, the bonus and stock options can influence companies’ performance to different extent: there is no strong correlation between salary and other independent variables but bonuses and stock options have a certain relevance; Bonuses have a significant impact on company performance, but on different industries it imposes different effects on them; the company performance is better under the incentive of stock options.