A Research On The Incentive Of State-Owned Enterprises' Top Managers

With the development of reforming on State-Owned Enterprises, there has been a increasing trend to optimize inner resource of corporate in aiming at upgrading corporate performance, which was based on human capital theory. The top manager plays a vital role in team production process. His or her enthusiasm on management will have direct effect on the further development of State-Owned Enterprises. This dissertation was made research on the incentive issues of State-Owned Enterprises' top managers, aiming at making individual contribution to furthering the development of the SOE reform.In this dissertation, the State-Owned Enterprises are divided into two kinds, the first is single State-owned corporate whose property structure has not changed, the second refers to the corporate where there is an absolute or relative dominant State-Owned stockholder. Top manager refers to top decision-maker in corporation, namely chairman of board and general manager. In this article, incentive refers to positive incentive, not generalizing incentive including restriction.The article pays much attention to the particularity and difficulties of the incentive of State-Owned Enterprises' top managers. On top manager's incentive, there are many differences between publicly share-owned companies and State-Owned Enterprises. The government department in charge plays main role in determining the incentive items. The decision-makers have inadequate motive and responsibilities in general. If we directly regard these top managers who are mainly appointed by government as the object of incentive, we will encounter the problems about their qualification. Owing to different mission and foundation of State-Owned Enterprises, it will be very difficult to evaluate their performance accurately. In addition, the incentive of State-Owned Enterprises' top managers will be faced with special group relation. All these elements will lead to many inherent difficulties in establishing scientific incentive mechanism for State-Owned Enterprises' top managers.With the decision-makers for the incentive of State-Owned Enterprises' top managers, the article discusses the deficiency of the structure of decision-makers for State-Owned Enterprises' top manager incentive, sense of responsibility and knowledge competence, and brings forward a framework for optimizing the State-Owned Enterprises' top managers' incentive decision-maker. According to the dissertation, top managers should be viewed among social network. With respect to group relation surroundings of State-Owned Enterprises' top managers' incentive, thearticle makes positive studies on different top managers, top managers within different levels of managers, and within employees. It also discusses possible result of the compensation difference and puts forward some advices on optimizing the group relation surroundings.With regard to the incentive means of State-Owned Enterprises' top managers, it points out that there are four incentive means usable, that is economic incentive, reputation incentive, control rights incentive and administrative promoting incentive. It discusses the advantage and disadvantage of the means above. It suggests that the economic incentive, reputation incentive, control rights incentive be essential for State-Owned Enterprises' top managers, and put forward some advices on how to improve the former three incentive mechanisms. From the point view of the author, the administrative promoting incentive should be abandoned in the general sense.With regard to the performance evaluation of State-Owned Enterprises' top managers. It discusses the advantage and disadvantage of accounting and capital market performance. However, the accounting-based performance may be easily manipulated by top managers. Owing to the incomplete capital market in our country, market-based performance will have more exterior "noises". Based on the realism of our country, the article puts forward a performance evaluation idea within the firm competition angle.With regard to the economic incentive model of State-Owned Enterprises' top managers, the optimum economic incentive model can associate the top manager's pursuing personal income maximizing with the firm's long-term performance, and makes top manager share adequate risks. It summarizes the experiences and lessons about the reform of State-Owned Enterprises' top managers' incentive, including the modus operandi and questions about annual compensation, stock options, and manager's holding stocks. It brings forward that a steady occupation expectation is a premise to the validity of any economic incentive model. In the end it advances a cross-term economic incentive model aiming at task performance, which will help to reduce "59 years old problem" effectively.