Research On Manager Incentive Mechanism In The Mixed Ownership Reform Of Competitive State-owned Enterprises

The establishment of a sound incentive mechanism is the core of solving the principal-agent problem, which is also the main issue state-owned enterprises (SOEs) should solve. Manager incentive has again become one of the focuses of academic and business circles since the mixed ownership reform of SOEs had been put forwarded in the Third Plenary Session of the Central Committee of the communist Party of China. Manager incentive issue was found in the principal-agent relationship after the separation of ownership and management right, the principal-agent relationship in the mixed ownership reform of SOEs is not only general but also special, its particularity shows that some managers acting the dual roles of’higher level managers’and’high-ranking officials’, new institutional arrangements should be made to motivate them. Under the background of classification reform of SOEs, establishment of manager incentive mechanism in the mixed ownership reform of competitive SOEs has important theoretical value and practical significance.The study is based on the perspectives of economics and management, which starts with the mixed ownership reform of competitive SOEs, uses key point of the principal-agent theory and motivation theory, puts forward manager incentive theory framework, mainly demonstrates the validity and rationality of the incentive theory by using comprehensive theoretical interpretation, quantitative analysis and multiple case study. Under the basis of theoretical and empirical study, the study tries to construct manager incentive mechanism in the mixed ownership reform and put forward corresponding countermeasures in order to provide a beneficial reference for the optimization and innovation of manager incentive mechanism in the mixed ownership reform.Through the historical review and realistic evaluation of the SOEs reform and manager motivation, which found that manager motivation is mainly based on administrative incentives and semi-market incentives in present competitive SOEs stage, corporate governance is still not standardized, dual roles of managers have not been effectively resolved, compensation and enterprises performance have not been effectively linked, medium and long term motivation mechanism has not been established in full, role of political supervision and restraint is still limited, lack of problems like market discipline and exit mechanism, the existing problems are not conducive to mobilizing the enthusiasm of the managers, which seriously hindered the mixed ownership reform. Therefore, the mixed ownership reform of competitive SOEs should firstly solve the above-mentioned problems in order to build a more effective incentive mechanism for managers.Therefore, under the basis of analyzing manager’s role, function, needs, hypothesis of human nature and behavior, the study combines with the practice of the mixed ownership reform, puts forward manager incentive theoretical framework from the three aspects of institutional incentives, economic incentives and social incentives. Comparing with competitive SOEs, the study shows that compensation incentives and equity incentive of the private enterprises promote the enterprises performance effectively by using multiple regression model analysis. The main reason lies in enterprises marketing incentives mechanism of competitive SOEs has not been built effectively, the mixed ownership reform should increase economic incentives, reduce administrative intervention of equity incentive. At the same time, further demonstrates the validity of the institutional, economic incentives and social incentives from the mixed ownership reform practice by selecting 4 representatives of competitive SOEs enterprises as multiple case study. Based on the theoretical framework and empirical research results, the study starts with the establishment of a standardized corporate governance, establishment of manager roles transformation and marketing hiring system, establishment of contract compensation incentives and equity incentive, build broad platform of career development, enrichment of spiritual incentive content, establishment marketing constraints and discipline mechanism for the purpose of establishment of an effective manager incentive mechanism. The study puts forward countermeasures of optimization of manager incentives mechanism by building a sound labor and personnel system and perfecting manager market and relevant policies and regulations of equity incentive in order to further stimulate the reform vitality of the mixed ownership.The study further shows that competitive SOEs belong to SOEs of business class, its primary goal aims to make profit, participate in competition according to the market mechanism. Enterprises manager incentive mechanism which is different from public welfare SOEs incentive mechanism should be built in the mixed ownership reform, the mechanism is expect to reduce administrative intervention, set up a market-driven mechanism, fully reflect manager’s value of human capital; Standardized corporate governance and market system of manager hiring will provide a good institutional environment for managers performing their duties and career development. Which will be the prerequisite of implementation of economic and social incentives; competitive SOEs should accelerate the pace of market-oriented reform, play a leading role in compensation and equity incentives by practicing the mixed ownership reform, improve the efficiency of the mixed ownership reform; Manger is supposed to be ’complex person’, who should not only meet the basic economic needs, but also meet the higher level of social needs, especially, managers who are in the late stage of their career development, they have strong career development needs, a broader career development platform should be built to meet the social needs of the managers; While improving the managers incentive intensity, market constraint and exit mechanism should be established to enable managers to enter and exit freely in order to protect the mixed ownership reform of talent vitality.The study complements the theoretical framework of manager incentive, provides the data and empirical support for the mangers incentives in the mixed ownership reform of competitive SOEs, which will optimize manager incentive mechanism of mixed ownership reform practice, which also will provide theoretical reference for manager incentive in the relevant departments.