A Study On Manager Compensation Incentive Of The State-owned Enterprises In China

China's state-owned enterprises have the imperfection of incentive and restraint mechanism,which leads to serious governance problems,such as the loss of state-owned assets,disguised welfare,low productivity,overcapacity,and excessive debt.One of the core problems is that there is no effective incentive and restraint mechanism.The human resource value and entrepreneurial talent of executives are not fully reflected in their compensation,or there is a distorted structure in executive compensation incentives.In fact,the principal-agent problem existing in state-owned enterprises is more complex and special than that of ordinary enterprises,and the traditional principal-agent theory has great defects because it emphasizes too much on the distribution status of capital elements,so it cannot be moved to the reform of state-owned enterprises under the conditions of socialist market economy,and thus can not provide effective theoretical and practical guidance.Since the Third Plenary Session of the 18 th Central Committee,the government has put forward the reform of classification and mixed ownership,with the goal of making the state-owned enterprises bigger and stronger and enhancing the market competitiveness of the state-owned enterprises.The recent Huawei event proves that only the role of fully respecting the value of labor force,and the enterprise income distribution mechanism which is based on labor distribution as the leading factor contribution is an important breakthrough to enhance the international competitiveness of Chinese enterprises.Therefore,the Marxist theory of income distribution provides an important tool for the current reform of income distribution in state-owned enterprises in China.This paper attempts to construct the theoretical framework and practical guidelines of the executive compensation of state-owned enterprises on Marxist political economy.The specific research process in this article includes the following steps:One is the theoretical research process.First of all,in the Marxist income distribution theory,principal-agent theory,incomplete contract theory,entroprenuer theory,and market competition structure theory sedited the analysis framework of the management compensation incentive theory of state-owned enterprises based on the combination of labor distribution and distribution of factors of production,and expounded the theoretical premise of the incentive of executive compensation in state-owned enterprises.Then,in the theory of macro-growth,this paper discusses the diversified executive compensation incentive of state-owned enterprises based on the heterogeneous labor and human capital of management,and explains the effect of incentive mode and structure on consumption and enterprise output.At the same time,in the micro-theoretical angle,this paper divides the market subject into the government,state-owned enterprises and private enterprises,and divides the competition model into common competition,the leadership of state-owned enterprises and the state-owned enterprises to follow according to the market competition structure.Through the multi-stage game equilibrium analysis method,the different compensation incentive methods and structure of executives' influence on enterprise output and social welfare are studied,and finally,through the analysis of the theoretical analysis and the meaning of macro-micro-complementary,this paper designs the empirical test and analysis of the practice of state-owned enterprise reform in China.The second is the process of empirical and case studies.First,this paper uses the data of listed enterprises in China and the method of difference-in difference and propensity score matching of difference-in-difference,to study the incentive methods and structures of executive compensation of state-owned enterprises with different nature,classification competition model and mixed-ownership pilot conditions,and the economic logic behind them.In order to investigate the impact of compensation incentive on non-listed mixed-ownership reform pilot enterprises,the data of china's central and local non-listed state-owned enterprises are introduced,and the effect of the change of executive compensation of state-owned enterprises before and after the mixing-ownership reform on the production scale,performance and economic growth rate of state-owned enterprises in the region is studied.Based on the typical pilot enterprises of state-owned enterprise reform under the conditions of classification and mixing,this paper examines the changes of executive compensation incentive mechanism of several central state-owned enterprise subsidiaries,Wanhua Chemical and Yunnan White Medicine,and its effects on the enterprise's production scale,investment and financing and performance.We draw the experiences and shortcomings of the reform of the incentive mechanism for executive compensation in state-owned enterprises after the comparison with Kunming Medicine.Third,on the basis of summarizing the previous theoretical research,empirical test and case analysis results,this paper draws the conclusion of this paper,and puts forward the policy suggestions to deepen the reform of the incentive mechanism of executive compensation of state-owned enterprises in China in the new period.The contributions and conclusions of this paper are:In theory,this paper firstly discusses the internal theoretical relationship between the reform of income distribution system in the primary stage of socialism and the reform of income distribution in state-owned enterprises,especially the political economic theoretical logic of the income distribution reform on the state-owned enterprises' managers,and the theoretical logical relationship between the incentive mode and incentive effect of executive compensation.Theoretically,this paper tries to introduce the concept of heterogeneous labor into the income distribution mechanism of state-owned enterprises in China,and explores and summarizes the income distribution theory of executives of state-owned enterprises based on the theoretical basis of distribution according to the combination of labor and factors of production.This paper attempts to construct macro-micro-theoretical models to expand the normative theoretical analysis between distribution mechanism and its effect on state-owned enterprises.Among them,the macro-theoretical model tries to introduce heterogeneous labor into the macro-economic growth model and discusses the effect of heterogeneous labor on the distribution mechanism of state-owned enterprises.In the model describing the compensation incentive effect of state-owned enterprises under the condition of micro-double oligarchy competition,this paper tries to introduce the principal-agent relationship and management compensation incentive into the industrial competition model.At the same time,this paper tries to explore the impact of management's compensation incentive from different dimensions.This paper puts forward the following theoretical analysis pointof: First,the executives of state-owned enterprises contribute management labor to the development of enterprises,which includes more working time,challenging and forward-looking labor,and so-called state-owned enterprise entrepreneurs' human capitals.They are both workers involved in the distribution of labor according to labor,and the providers of management and capital elements and enjoying partial suplus control power and demand power,which participates in the distribution of current and future profits of the enterprise.Second,according to the above distribution mechanism,the form of compensation paid by senior executives of state-owned enterprises should include the structure of ordinary salary,bonus and equity.State-owned enterprises determine fixed salary levels based on the level of their own endowments.The bonus incentive of the senior executives of state-owned enterprises is linked to the performance and business indicators of the enterprise,which helps improve the output and profits of the enterprise.At the same time,the above two parts of the executive compensation should comove with the enterprise's profit and loss.Third,the enterprise executives can obtain equity incentive to share the profits of the enterprise,the proportion of equity incentive should be matched with their labor time and the risks faced.The firms should establish a reasonable entry and exit mechanism,and the pricing of equity incentive should be completed in a diversified shareholder environment.In addition,enterprises should design the reasonable pay gap between senior executives and ordinary employees and the reasonable pay gap between senior executives,the reasonableness of the gap is reflected in the reasonable return on capital return,otherwise excessive incentives and insufficient incentives will have a negative impact on the output and performance of enterprises.Fourth,in the micro-environment of the competition between state-owned enterprises and private enterprises,a small amount of output bonus incentives have less negative impact on social welfare,but a larger proportion of production bonuses will encourage state-owned enterprise executives to make over-investment decisions,resulting in overcapacity,thus squeezing out the profits of private enterprises and reducing the level of social welfare.In the industries or businesses with more sufficient competition,state-owned enterprises are allowed to carry out equity incentives,incentives for 10% of total share can usually be optimal,and the proportion of executive equity incentives should not exceed 20%.Fifth,the equity incentive weight is too high or some senior management weight is too high,will make them pay too much attention to the future profits of enterprises,causing overinvestment and overcapacity and harming social welfare.Compensation incentive should be more in the more competitive industries,while other incentive modes(e.g.promotion)should be implemented in state-owned enterprises in industries with strong monopoly,or compensation incentives should be more widely represented in the more market-oriented management positions in state-owned enterprises.Other incentive modes(such as promotions or civil service treatment)are highlighted in the role of smaller market-oriented industries and the positions of state-owned capital supervisors or agents.In practice,this paper firstly analyzes and tests the incentive mechanism and incentive effect of senior executives of state-owned enterprises under the different types of competition and equity structure conditions,and put forward the policy guidance to improve the form and structure of manager compensation incentive in state-owned enterprises under the background of classification reform and mixed ownership reform.From the data analysis,this paper found that under the salary suppression,the implementation of high bonus incentives by state-owned enterprises is more conducive to reduce the financing constraints,improve enterprise performance and social welfare,especially the central state-owned enterprises.In the process of mixing ownership and in the case of state-owned enterprises in the strong market competition industry,expanding the proportion of bonuses to salary is more conducive to improving the operating performance of state-owned enterprises,and the implementation of equity incentives by state-owned enterprises has a positive effect on easing financing constraints,expanding the size of enterprises and performance.In the compensation structure of state-owned enterprise executives,the proportion of equity over bonuses helps avoid the negative effects of excessive bonuses.In the design of equity incentive plan,it is necessary to avoid using the equity incentive plan disguised as a tool to delay the payment of bonuses,and enhance the flexibility and rationality of the design of the incentive plan,so as to further highlight the positive effect of equity incentive;too much gap between executives of state-owned enterprises and ordinary employee will boost revenue growth,but reduces social welfare.The large equity incentive gap among senior executives of local state-owned enterprises is conducive to improving the performance of enterprises and promoting the growth of corporate profits.This paper finds from the classic case analysis that: the pilot of mixed ownership reform of non-listed state-owned enterprise subsidiaries promotes the diversification of enterprise equity and governance,breaks the salary limit mechanism,activates the compensation mechanism of the senior executives of state-owned enterprises,and increases the proportion of short-and medium-term bonuses and long-term equity incentives.However,the uncertainty of the bonus mechanism is greater,and the stock option plan,which is more incentive and reasonable,has not been paid much attention,and the senior executives of listed state-owned enterprises after the change have received fixed compensation,performance bonus compensation and employee shareholding and dividends,which has greatly enhanced the continuous competitiveness of enterprises and promoted the dominant position in the industry competition.However,equity incentives cannot be adjusted flexibly,and the incentive gap between executives and between executives and employees is too large.The compensation incentive plan of the listed non-state-owned enterprise executives after the mixed ownership reform pay stakes too much emphasis on enterprise profit appraisal,while ignoring the more comprehensive performance index appraisal will affect the long-term development of the enterprise.The above research conclusions have rich practical guidence on the current reform of the incentive mechanism for executive compensation of state-owned enterprises,and help this paper puts forward some relevant policy suggestions.In the process of classification reform and mixed-ownership reform,the boundaries between government and enterprise need to be further clarified in order to clarify the identity of state-owned enterprise executives.Designing the executive compensation system of state-owned enterprises according to the classification reform is the proper idea under the background of the classification reform of state-owned enterprises.After the reform of mixed ownership,equity has become more diversified,and the market-oriented compensation incentive appraisal mechanism should be introduced.The firms should use the market-oriented mechanism to determine the level of executive compensation incentive;enterprise should rationalize the pay gap between executives and between executives and employees.In the process of classification reform and mixed-ownership reform,stated-owned enterprises should realize the match between the incentive mechanism of senior executives and the mechanism of assessment and restraint.We should deal with the problem of uneven distribution in the process of the transformation of income distribution mechanism of state-owned enterprises,through taxation,mechanism adjustment and strengthening the power of state-owned capital.The compensation incentive mechanism for executives of state-owned enterprises should be combined with the establishment of the "entrepreneurs" team of state-owned enterprises.