Legal Regulation On Senior Executive's Salary In State-owned Enterprises

The modern companies'ownership and power of management are highly separated, and the senior administration and supervision authorities, taking directors and managers as its core, grasp the actual control power of the company. Executive's salary have become a basic means and method to play the incentive function, reduce the agent's cost and improve the value of company.Generally speaking, an effective salary scheme is considered to be linked with the operating performance, and its effective degree is proportional to the correlation between the two. From foreign practice can be seen that only when the market can not guarantee the strong relevance of executive pay and performance, we need to enhance the role of law. But even so, the role of law is limited, and its mode of action is specific-oriented. The law should not and can not determine the specific forms and amount of executive salary. The objective of regulating executive salary is to ensure and strengthen the positive correlation between the executive pay and company performance, which is commonly referred to as "pay for performance".The issue of state-owned enterprises executive salary in China has problems with international traits and its own particularity. This article examines the situation in terms of legal regulation of state-owned enterprises executives pay in western countries and sums up which can be used for reference of our country, then analyzes the realistic problems about legal regulation for the executive salary, finally puts forward related institutional improvement suggestions based on China's national conditions. This article except preface is divided into four chapters.Chapterâ… points out the object and the theoretical framework. The first part of this study identified the category of key objects, clears the "state-owned enterprises", "senior management personnel", "salary" concept and category. The second part presents two basis theories, namely, human capital theory and agency theory.Chapterâ…¡examines the situation in terms of legal regulation of state-owned enterprises executives pay in western countries. The first part introduces the legislation and judicial practice of executive salary in western public companies, and discusses the role of law in accordance with the purpose and effect of that regulation. The second part inspects macro-control management system of state-owned enterprises and regulatory mechanisms of state-owned enterprises executive salary in western countries, and sums up the features of executive salary regulatory system in state-owned enterprises of western countries.Chapterâ…¢analyzes the realistic problems of the legal regulation for the executive salary. The first part lists the existing legal regulation, analyzes the law briefly, and pointed out the deficiency in the existing legal regulation. The second part explains the reason that causes the current problems of state-owned enterprises executive salary. Meanwhile, it also explained the necessity of legal regulation on state-owned enterprises executive's salary.Chapterâ…£puts forward relevant suggestions. Improve the information disclosure system and standardize the salary information disclose to eliminate the information asymmetry; strengthen the role of independent directors and salary committee on executive pay; reduce the administrative control on executive pay and respect the human capital value and select the senior executives of state-owned enterprises in accordance with the market criterion; implement the judicial correction on the unreasonable executive's salary.