Abstract: Executive pay and corporate dividends policy are topics that attract considerable public concern. They are also hotspots of theoretical research. This article analyzes the correlation between executive pay and corporate dividends, and then analyzes the factors that have impact on the relationship of executive pay and corporate dividend based on the principal-agent theory and by empirical research method. The conclusion is that executive pay and corporate dividend show staging correlation and profits, cash flows and the size of the company have a stable influence on the relationship of the two. This article attempts to adopt a new perspective to the principal-agent problem and provides a solution to improve corporate governance structure.

Key words: principal-agenttheory, executivepay, corporatedividends, supervisionandencouragement