A Study of Executive Compensation Incentives and Firm Performance

Abstract

Proper executive incentives alleviate agency conflict and improve firm performance. This study examined the pertinent literature on the recent study of executive compensation incentives and company performance. Through the literature analysis method, the last five years of relevant literatures were classified according to monetary pay incentives, equity pay incentives and pay gap incentives. This paper summarized the common conclusions that were obtained from the current researches and discussed some deficiencies of current researches. At the same time, this paper also put forward suggestions on sample selection, research methodology and other shortcomings in the current researches. By analyzing and integrating the literature from 2018 to 2023, it helps company owners to improve company performance starting from executive compensation incentives in the corporate governance process. At the same time, this paper will provide an outlook on the possible directions of future related research and provide new ideas for future research.