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Deferred pay encashment as an important incentive mechanism for executives in transition economies is playing an increasingly important role in company performance, however it has not been explored by the existing literature. This study attempts to investigate the relation between deferred pay encashment and performance at China's state-owned firms, and finally finds that deferred compensation encashment has a great effect on growth by virtue of manager behaviors and impose a strongly positive effect on growth performance of a company. The study proposes that an equity-being-main incentive strategy to incorporate options and dividends into executive pay in the middle-long run needs to be implemented conditionally for state-owned firms and meanwhile different motivation means should be employed for different stages to improve management performance.

With the 169 listing enterprises of machinery, equipment and instrumentation industries as the samples and by means of the 2004 and 2006 data, this paper deals with the empirical relation among the first major shareholders equity ration, the second to the fifth largest shareholding ratio and Z index and the corporate governance performance. The research results indicate that, before the share reform, the first major shareholders equity ratio is not in obviously correlation with the corporate governance performance, but in remarkable correlation with the agency cost, and that the second to the fifth largest shareholding ratio is in significant correlation with the corporate governance performance. Z index is in the significant negative correlation with the corporate governance performance. After the share reform, the first major shareholders equity ratio is in significant positive correlation with TobinQ value and the agency cost, and the second to the fifth largest shareholding ratio is in significant positive correlation with the corporate governance performance, but is in significant negative correlation with agency cost; and also Z index is in significant negative correlation with the corporate governance performance.