Welcome to Francis Academic Press

Academic Journal of Business & Management, 2023, 5(17); doi: 10.25236/AJBM.2023.051701.

Which has stronger incentives for performance - equity or compensation


Zhenwei Liu

Corresponding Author:
Zhenwei Liu

School of Economics and Management, Guangxi Normal University, Guilin, China


The modern separation of ownership and control in listed companies has given rise to principal-agent problems, and providing incentives to senior management within the company has become one of the important means to address these issues. This study empirically examines the relationship between equity incentives, compensation incentives, and corporate performance using data from Chinese A-share listed companies during the period from 2015 to 2019. The research findings indicate that executive equity incentives contribute to improving company performance, showing a significant positive correlation. Similarly, executive compensation incentives also exhibit a significant positive impact on corporate performance. Additionally, the incentivizing effect of executive equity incentives on company performance is more pronounced compared to compensation incentives.


Equity incentives; Compensation incentives; Corporate performance

Cite This Paper

Zhenwei Liu. Which has stronger incentives for performance - equity or compensation. Academic Journal of Business & Management (2023) Vol. 5, Issue 17: 1-6. https://doi.org/10.25236/AJBM.2023.051701.


[1] Wang Hongdun, Yue Hua, Zhang Xu. Research on the Relationship between Corporate Governance Structure and Corporate Performance—A Perspective based on Corporate Total Factor Productivity [J]. Shanghai Journal of Economics, 2019, (04): 17-27.

[2] Wu Yuhui, Wu Shinong. Study on Selfish Behaviors of Corporate Executives and Their Influencing Factors - Evidence Based on the Draft of Equity Incentive for Listed Companies in China [J]. Journal of Management World, 2010, (05): 141-149.

[3] Chen Zhiguang. An Empirical Research on a Senior Executive's Remuneration [J]. Modern Economic Science, 2002, (05):58-63+70-95.

[4] Sheng Mingquan, Che Xin. Managerial Power, Executive Compensation and Corporate Financial Performance [J]. Journal of Central University of Finance & Economics, 2016, (05): 97-104.

[5] Wei Gang. Incentives for Top-Management and Performance of Listed Companies [J]. Economic Research Journal, 2000, (03): 32-39+64-80.