Compensation For U.S. Executives: An Inspiration For Our Nation

This paper focus on the situation of compensation for U.S. executives,which is unrealistically high and nothing to do with the performance. Paper aimed at reflect the root of the problem,also provide reference for China's Pay system and corporate governance.The article has 30 000 words totally, the main part is divided into four parts.The first part presents the issues related to Executive Compensation. This section is to describe the situation and identify problems, therefore, series of data was used to outline the status of the U.S. executive pay firstly. From this we can see that the U.S. executive pay grew rapidy and opened the gap with General staff since the 20th century, Then, comparing with company performance data and the backgroud of financial crisis, we Found that executives receive salaries does not match their performance . Through the analysis of AIG case, we can find the really bad situation about the. executive pay in the U.S, which is nearly out of control .The second part analyzes the basic theory of executive pay system. This section intended to state, although the executive pay system is being questioned, but also has a strong defenders. They wanted to show, Although the executive compensation system has many flaws, but it is still regarded as a good system, and has a trend of continuous improvement. The traditional core theory is any seemingly "high price "of compensation all came from a fair bargain by the Board and through market forces. This prevailing view is also the point I wanted to refute below.The third part reflection on the of the problem of U.S. executive pay system. This section is the core of this article,i summarized the justification of the pay system as six parts, and refute them one by one. In particular, traffic view firmly believed that "fair bargaining between directors and executives" has changed into "Shield each other between directors and executives". At last, I also analyze the reasons of this new problem from multiple angles.The fourth part makes a reflection of the executive compensation system in China. Combined Chinese special national conditions and lessons for America, this paper presents a number of reform proposals.