Research On Legal Issues Of Executive Compensation In State-Owned Enterprises

Executive compensation is a part of modern corporate governance.The state-owned enterprises of our country are a kind of public-owned enterprises under the socialist system,and occupy the core position in the national economy.With the advancement of the reform of state-owned enterprises,more and more state-owned enterprises enter the capital market through listing,and play a more important role in the development of national economy.For state-owned listed companies,there is a strong public nature,if the executive pay is too high,it will inevitably cause popular debate.Therefore,it is necessary to make a necessary study on executive compensation of state-owned enterprises,especially to regulate it from the legal standpoint.Equity incentive is one of the main incentive means in modern enterprises.The proportion of executive compensation in state-owned enterprises is also increasing,which has caused the rise of executive compensation in state-owned enterprises.This model has been questioned to a certain extent.Under this background,some state-owned listed companies start restrictive stock plans to replace equity incentives,but it is an indisputable fact that the compensation system of senior executives in state-owned enterprises has been alienated.The design of executive compensation incentive system of state-owned listed companies is usually to reduce agency costs and promote the solution of compensation agency problems.However,under the influence of some objective factors,including changes in bank interest rates and rising stock prices,executives of state-owned enterprises may acquire many unexpected wealth,and then substantially increase their salary quota.If executives of state-owned enterprises use their own power or industry rules to set their own salaries,it may also harm the interests of state-owned enterprises and the majority of shareholders.In order to promote the stable development of state-owned enterprises and the whole capital market,the executive compensation of state-owned enterprises must be rationalized.For the regulation of executive compensation in state-owned enterprises,the core lies in how to properly combine the company law and relevant national laws and regulations,and put forward targeted measures and suggestions around the relevant issues such as compensation decision-making power,information disclosure,judicial intervention and so on.As a part of the financial market,state-owned listed companies must abide by the legal regulation of the financial market.There are two main international practices.One is the practice represented by the United States.The idea of this approach is to regard corporate governance as a single-tier structure,strengthen the role of independent directors,improve the independence of the compensation committee,make the compensation committee become the planner of executive compensation,highlight the notarization and independence of procedures,and have a detailed information disclosure mechanism of executive compensation,thus forming judicial practice.Three standards and commercial judgment principles.For the courts,they generally refuse to examine the rationality of executive compensation,while tax and accounting departments tend to intervene by means of adjustment.Although the effect is not good,it can show the attitude of the government to intervene in executive compensation.Second,Germany is the representative of the practice,advocating that executive compensation decision-makers need to take care of the obligation to promote the rationality of executive compensation.In this regard,supervisors play an important role,and should take into account the company's performance and operating conditions in order to determine whether executive compensation is reasonable,and then to check the increase of executive compensation in advance.This standard is subjective,but it can effectively assist the court to review.For our country,the executive compensation of state-owned listed companies has a certain degree of alienation,sky-high salary appears frequently,which causes people's heated discussion.But the reform of state-owned enterprises is the trend of the times.The pace of reform can not be stagnated because of the executive compensation problem.Therefore,the relevant departments of the state have introduced many management measures,including "Listed Companies Shares".The measures of power incentive management and salary restriction order should make the salary incentive system of state-owned enterprise executives tend to be perfect as far as possible.China's corporate governance structure is different from that of the UK and the USA.It does not advocate independence,but mainly adopts a two-tier system.The role of independent directors is not prominent.In addition,the capital market started late,the reform of state-owned enterprises is still in the deep water area,and the economic transformation has achieved preliminary results,but it is not mature enough.In this context,the corporate governance and ownership structure of state-owned listed companies,as well as the external regulatory environment,all have distinct Chinese characteristics,which are far from the two typical practices of the United States and Germany.It is difficult to achieve procedural justice and to regulate the rationality of executive compensation in advance.Therefore,this paper puts forward the view that the decision of executive compensation in state-owned enterprises can be used for reference in Japan and Korea,that is,executive compensation is decided by the board of directors and the shareholders' meeting,in which the shareholders' meeting decides the amount and form of executive compensation in state-owned enterprises,and the board of directors decides the specific implementation plan of executive compensation distribution in state-owned enterprises.At the same time,we can also consider introducing administrative power appropriately to promote the reasonable salary of state-owned enterprise executives through the legitimate intervention of the government.In the whole process of legal regulation,compensation decision,information disclosure and judicial intervention are the key to solve the problem of executive compensation in state-owned enterprises.Based on this idea,this paper is divided into the following six parts:The first part is the introduction,which mainly puts forward the legal regulation of executive compensation in state-owned enterprises under the background of the reform of state-owned enterprises.Taking the state-owned listed companies as the main body,taking full account of the realistic requirements of the legal regulation of executive compensation in state-owned enterprises,this paper discusses the significance of this study,and expounds the current research situation at home and abroad.Describes the current situation,including the research on the rationality of executive compensation and legal regulation,and introduces the research methods,paper structure and innovation points.The second part is "the theoretical basis of the legal regulation of executive compensation in state-owned enterprises".This chapter mainly defines the concept of executive compensation in state-owned enterprises and executive compensation in state-owned enterprises.Executive compensation in state-owned enterprises is a concept with Chinese characteristics,but the essence is derived from the concept of executive compensation in Western countries,the same is true of executive compensation in state-owned enterprises.In addition,it also analyses the relevant theories of the legal regulation of executive compensation in state-owned enterprises,including the motivation,legitimacy,value and goal of the legal regulation of executive compensation in state-owned enterprises,legal intervention and other related theories.On the whole,directors' independence of corporate governance in our country is insufficient,and the operation of state-owned listed companies depends strongly on the management.The executives of state-owned listed companies usually get high salary by means of equity incentive or set salary by themselves,which leads to alienation of incentive mechanism and negative incentive.This is one of the main motivations for the legal regulation of executive compensation in state-owned enterprises.The legal regulation of executive compensation in state-owned enterprises must embody certain legitimacy,have clear value and goal,in order to carry out more reasonable legal intervention.The third part is "The Compensation Standard and Design of State-owned Enterprises",this chapter mainly analyses the relevant theories of the Compensation Standard Design of State-owned Enterprises,puts forward the reference point of Compensation Standard,makes assumptions on the Compensation Standard of State-owned Enterprises,and obtains the results through empirical research.Executives' salary standard has always been a problem discussed by scholars at home and abroad.How to measure Executives' salary has become the object of discussion by many scholars.The standard of executive compensation is mainly to find a reference point,that is,through horizontal comparison,to judge whether the executive compensation exceeds market expectations and whether it meets the scale and effect of enterprise development.Reference points are mainly divided into external reference points,internal reference points and personal reference points.Through the impact analysis of these reference points,the hypothesis is tested separately.Finally,the paper gives the principle suggestions and the design process of compensation standard for state-owned enterprise executives,and introduces the control system after the determination of compensation standard for state-owned enterprise executives.The fourth part is "the legal regulation of executive compensation decision-making power in state-owned enterprises".This chapter firstly makes a legal analysis of executive compensation decision-making power in state-owned enterprises on the basis of company law,and then puts forward two key issues of the legal regulation of executive compensation decision-making power in state-owned enterprises,including the right to speak given by law to shareholders,and the law.The independence of the Remuneration Committee under the legal framework.Executive compensation of state-owned enterprises belongs to a management matter in daily operation.Under the guidance of the board of directors,shareholders' voice should be strengthened so that the decision of executive compensation of state-owned enterprises is under the supervision of shareholders.At the same time,attention should be paid to the independence of the compensation committee under the legal framework.Then it introduces the experience and Enlightenment of foreign countries on the legal regulation of executive compensation decision power,including the intervention of British and American company law,the intervention of German company law and the intervention of Japanese and Korean company law.Finally,it puts forward the Legal Regulation Countermeasures of executive compensation decision power of state-owned enterprises in China,including the legislative status and power of executive compensation decision power of state-owned enterprises.Force distribution,evaluation and improvement of executive compensation decision-making power in state-owned enterprises.The fifth part is "the legal regulation of the disclosure of executive compensation information in our state-owned enterprises".This chapter first analyses the legislation and priority of the disclosure of executive compensation information in our state-owned enterprises.From the legislative point of view,information disclosure contributes to information symmetry,makes more supervision of executive compensation in state-owned enterprises,helps to draw lessons from relevant issues,and improves the strength of legal regulation.From the perspective of priority,information disclosure should have certain priority among many rights.Then it introduces the experience and Enlightenment of foreign countries on the disclosure of executive compensation information,including the experience and Enlightenment of the United States on the disclosure of executive compensation information,and the experience and Enlightenment of other countries on the disclosure of executive compensation information.The requirement of disclosure of executive compensation information in the United States is more stringent.This information should be disclosed in detail to enhance the reliability of ex post supervision.The disclosure of executive compensation information in American companies is mainly form disclosure,followed by narrative disclosure.The requirements for disclosure of executive compensation information in European Union countries have evolved from simple to strict,and are in constant improvement.Finally,the paper puts forward the Legal Regulation Countermeasures for the disclosure of executive compensation information in state-owned enterprises.The sixth part is "Judicial Intervention of Executive Compensation in China's State-owned Enterprises".This chapter first analyses the common problems of Judicial Intervention of Executive Compensation in China's State-owned Enterprises,including the determination of executive compensation and related subjects in state-owned listed companies,the damage of improper executive compensation to the interests of companies and small and medium shareholders,and the procedure of judicial review.Then it analyses the necessity of judicial intervention in executive compensation of state-owned enterprises in China.From the experience of judicial intervention on executive compensation in foreign countries,the practice of judicial intervention on executive compensation in the United States is different from that in other countries,emphasizing the three standards of legitimacy review,and strictly following the principles of commercial judgment.There is also a new way of judicial intervention in Western countries: the system of the right of remuneration recovery.The experience of judicial intervention on executive compensation abroad is worth learning from our state-owned enterprises,which is helpful to improve the formulation of countermeasures.At last,this chapter puts forward the judicial intervention countermeasures of executive compensation in our state-owned enterprises,including the judicial intervention basis of executive compensation in our state-owned enterprises,the three international standards,the commercial judgment rules and the rationality of compensation,the problems existing in the judicial intervention of executive compensation in our state-owned enterprises,and the judicial intervention measures of judging the rationality of executive compensation in our state-owned enterprises.Shi.The seventh part is "conclusion".This chapter summarizes the research results of the full text,pointing out that there are many internal and external factors that cause the problem of executive compensation in state-owned enterprises,and it is also difficult to solve.The determination of executive compensation decision power and the strict implementation of information disclosure system in state-owned enterprises help to rationalize executive compensation in state-owned enterprises.Based on these two points,judicial intervention can achieve greater results,and then can better solve the problem of executive compensation in state-owned enterprises.