The Effects of Executive Incentives on Firm Performance in China: The Moderating Role of Earnings Management

The paper breaks down executive incentives into three categories: executive salary, executive equity, and executive perks and the relationship between executive incentives and firm performance, and the moderating role of earnings management on this relationship, are discussed. It analyzes the panel data of publicly listed firms on the Chinese stock exchange from 2013 to 2023. The findings indicate that executive pay and executive equity can significantly and positively affect firm performance. Conversely, executive perks are negatively associated with firm performance. Furthermore, the interrelationship among chief executive pay, executive stock, executive compensation, and company performance is moderated by earnings management.