Top-management compensation incentives and potential growth of SMEs: An empirical study based on components analysis

Top-management compensation is an inherent issue of enterprise growth. In this paper, we establishes an evaluation system of compensation incentives for top-management in small & media-size enterprises(SMEs), and gives an synthesized evaluation and rank of 118 SMEs in China utilizing data in 2004-2005. The study documents that the incentive styles of stock ownership structure and annuity are positive to growth, and the compensation difference is negative to growth but not significant in statistics. Then the article gives some discussions about the results according to the economical environment and characteristics of SMEs in China. The study suggests that the compensation in SMEs should be designed systematically and complementally in order to provide incentive stimulation and realize bidirectional growth of both employees and enterprises.