Chinese Executives Of Listed Companies Performance Incentives

As for the research background of this essay, top management incentive is one of the key problems among modern firm theories. In the principal-agent theories' point of view, it is the incentive scheme among shareholders, other stakeholder and managers, while in the view point of the property right and transaction cost theories, it is one of the components of contracts among them. And performance incentive is the core problem among those issues.During the past two decades, western countries have been enriching the monitoring and incentive of top management through the economy practices, and they carried on the adjustment and innovation for company's inner and the outer incentive mechanism, attempting to gain better corporate performances and behaviors through performance incentives. Meanwhile, the arrival of new technology times as well as new economy also brings the new task and challenges for corporate governance and incentives. With the development of financial innovations, managerial ownership and options are also innovated greatly. Therefore, the performance incentive of top management has been greatly promoted.Top management incentive has been acting as a problem throughout the entire process of China economy reforms. And it is a core problem, which relates with the reform of national owned enterprise closely. While non-national owned enterprise, acting as new forces of China traditional planned economy, faces with the same problem as well, and it has been carried on the beneficial exploration and the positive attempt. Currently it is brought to the agenda gradually with the requirement of China capital market and the coming of new economy, which makes top management incentive solution more urgent and essential.Therefore, it becomes necessary to provide policy adjustment direction and target through describing China enterprise' incentive situation precisely and discovering potential problems of performance incentives, and it also provides a theoretical basis both for institutional adjustment and micro-economy incentive scheme design. It will be significant for the national owned enterprise reform, the normative operation of non-national owned companies, capital markets developments as well as institutional adjustments. That's why this paper focuses on the research of top management performance incentives.As for the objective of this research, incentive is difficult to measure and sort, therefore we will take place it by measurable substitution "compensation" approximately. Monetary compensation is a general resource claim and it is highly correlated with non-monetary compensation, thus we take place of "compensation" by "monetary compensation". Furthermore, we make a detailed study on pay as the substitution for monetary compensation, since in China main constituent of monetary compensation is pay. In our research, we find that promotion is another important factor of incentives besides compensation, then we measures incentives by two dimensions, which are compensations and promotions.Generally speaking, the forms of firm organization may affect performance incentives. But as for Chinese enterprise, list companies are the most formal ones with the characteristicof same information specifications and are regulated by the same law, so they can provide us with more comparable information. Thus we chose list companies as our samples. In order to reveal the characteristics of performance incentives, we mainly focus our study on pay-performance relationship. And we also limited our conclusions on China list companies. We enlarged our conclusion to other forms of enterprise only if we have made normative analysis.As for the study methodology, this essay follows the combination of traditional normative and empirical studies of economics research. We try to gain the result by scientific analysis and deduction under the constraints of data and theoretical tools. We follow the following standard steps to make researches. 1. To identify the nature of the problem. 2. To set the goal of research. 3. To put forth the hypothesi...