Abstract: This paper researches the relation between executive compensation and corporate performance from the perspective of large shareholder by taking 2009—2011 private listed companies as the sample, then studies the incentive effect and entrenchment effect of large shareholder control on the incentive effects of executive compensation. Our results show that the greater the proportion of internal executives, the smaller the impact of executive compensation to corporate performance; the larger the largest shareholding ratio, the greater the impact of executive compensation to corporate performance. Further we found that the large shareholder control relates with the incentive effects of executive compensation, and has the incentive effect and entrenchment effect.