The Causality Between Executive Compensation, Equity Concentration, and Corporate Performance: A Multiple Regression Analysis

Academics, practitioners, and politicians have all become increasingly interested in and engaged in discussion about the correlation between executive compensation, equity concentration, and corporate performance in recent years. This growing attention can be attributed to the critical role that effective executive compensation and equity structures play in shaping a company’s success, as well as their potential impact on the overall economy. This research paper is to examine the interplay between executive compensation, equity concentration, and corporate performance through multiple regression analysis on 4652 non-financial A-share listed companies in China between 2018 and 2022. By exploring the underlying mechanisms and interactions among these three factors, this paper aims to shed light on their influence on corporate success and provide practical recommendations for companies to optimize their management strategies. Through this analysis, it hopes to contribute to the current body of literature on this subject and support the development of more effective and sustainable corporate governance practices.