| With the gradual improvement of China’s market economy system, the payment systems of China’s enterprises have gradually become market-oriented, too. However, the payment systems of the top executives in China’s state-owned monopoly enterprises still remain to be one of the most controversial topics.In particular, the sky-high pay gain of the top executives in China’s state-owned monopoly enterprises, as well as the huge pay gaps existed in and among those enterprises, is the forefront concerns of the Chinese society. This study, based on China’s institutional background and together with the dynamic evolution process of China’s payment systems, conducts an in-depth and systematic research on the payment systems of the top executives in China’s state-owned monopoly enterprises in order to improve it and thus provide a theoretical reference and practical basis for the reform of the payment systems in China’s state-owned monopoly enterprises.This study, based on the analysis of China’s payment systems and the evolution of the payment systems of China’s state-owned monopoly enterprises, probes into the incentive effects and their rationality of the payment systems of the top executives in China’s state-owned monopoly enterprises. To be specific, this study, based on the correlation between the actual performance of China’s state-owned monopoly enterprises and the payment systems of relevant top executives, the pay differences among the top executives and the pay differences between the top executives and general employees in those enterprises, as well as carrying out the research on "the Inchworm Effect" concerning the evolution of the payment systems in those enterprises, finds out that the asymmetric relationship exists between the pay performance sensitivity and relevant pay changes while different market performances appear as far as the above-mentioned enterprises are concerned. Moreover, this study, through the usage of "the Inchworm Effect", also analyzes the formation and causes of the pay gaps in China’s state-owned monopoly enterprises.First and foremost, this study, by choosing "the Economic Value Added"(EVA) performance index of China’s state-owned monopoly enterprises as performance index variables, uses the payment data of relevant top executives in listed companies from2002to2010to analyze their salary incentive and their stock-based incentive of those enterprises and preliminarily evaluate the rationality of the payment systems of relevant top executives in those enterprises. The above-mentioned research shows that the salary incentive for the top executives in those enterprises is positively related to the current company performance; the sensitivity caused by those top executive’s actual pay to their actual daily performances in the stated-owned monopoly enterprises is higher compared with their counterparts in those non-monopoly enterprises; excessive incentive systems exist as far as the payment systems of those top executives in China’s state-owned monopoly enterprises are concerned. In addition, in the sample groups of various performance levels, there is asymmetric phenomenon between "pay and actual performance sensitivity", to be specific, the sensitivity of the performance degree of the top executives is positive within the high performance sample groups while the sensitivity of the performance degree is negative within the low performance sample groups.Then, this study, based the selection of the data from the listed state-owned monopoly enterprises and the listed non-monopoly enterprises between2002and2010as well as "the Economic Value Added"(EVA) performance index of China’s state-owned monopoly enterprises as performance index variables, conducts a multiple regression analysis to the correlation between the actual market performance and the pay gaps existed among the top executives, the top executives and the general employees, as well as the correlation to the relationship between the pay gaps and the enterprise’s different performances, namely, the differences between the state-owned monopoly industries and those non-monopoly enterprises. From the research results the author of this study can conclude that, unlike those non-monopoly enterprises, the actual performance of the state-owned monopoly enterprises is insensitive to the pay gaps among the top executives, between the top executives and the general employees.Finally, after a separate selection of the pay data sample of the top executives and the general employees in listed state-owned monopoly enterprises from2002to2010, this study, taking the full advantage of "the Geometrid Effect", further analyzes the causes of the pay gaps in China’s state-owned monopoly enterprises. As far as the listed enterprises are concerned, the results of this study prove that strong "Geometrid Effect" exists as to the pay changes of China’s state-owned monopoly enterprises. When the enterprise’s earnings are rising, differences remain as far as the top executive’s pay performance sensitivity and the general employee’s pay performance sensitivity are concerned; when the enterprise’s performance are declining, differences also remain as far as the top executive’s pay performance viscosity and the general employee’s pay performance viscosity are concerned. At the same time, strong "Geometrid Effect" also exists in China’s state-owned monopoly enterprises, namely, the top executive’s pay performance sensitivity is much higher compared with the general employee’s pay performance sensitivity while the enterprise’s actual performance is booming.
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