Deferred Compensation And The Research On Compensation System Of Managers Of State-owned Enterprise

In terms of enterprise theory, the basic framework of enterprise's ownership is to arrange the privilege of residual control to enterprises ' Managers and arrange the privilege of residual demand to enterprises ' Managers and also owners. However, because of historical reasons, in China, the government possesses the privilege of residual control of State-owned enterprise. Meanwhile, the government also possesses the most privilege of residual demand in order to prevent State-owned assets from decreasing. This abnormal structure of corporation governance often leads to very poor firm performance. With the development of the economic system reform and a series of measures having implemented, now State-owned enterprise possesses more and more privilege of residual control. This lead to incentive-intensity of enterprise executive rising and remedying the limitation of deficient prompting. But, in fact, there exist very serious problems in the incentive based on the ownership of more privilege of residual control, such as. the internal control, the phenomenon of 59, excessive position consumption, short dated behavior, excessive investment, and transferring state assets.In order to eliminate these bad phenomena, we should quicken the reform of State-owned enterprise's property rights; on the other hand, we should strike up the system of effective incentive and constraint structure for State-owned enterprise's managers as soon as possible. Compensation incentive is the center content in the system of incentive restriction for management supervisors. With more and more recognition of State-owned enterprise's managers long dated behavior, the proportion of deferred compensation will increase incessantly.Deferred compensation system includes stock option, enterprise annuity, retirement pension and fringe benefit. Different deferred compensation has different incentive effect. Considering the difficulty of collecting data and the maneuverability of research, this paper particularly choose stock option as research target. This paper uses the State-owned public companies whose financial report was publicized in 2001,2002, 2003 and screens out 162 companies in terms of both board chairman and general manager both possessing stock option and applies the method of demonstration to analyze the relativity the ratio of stock-keeping, the quantity of stock-keeping of management supervisors in Chinese public companies withmanagement performance.This paper makes an analysis on the whole sample and makes a conclusion as follows: there is not relativity between the quantity of stock-keeping and management performance in 2001,2002 and 2003. Therefore, in order to boost up the deferred compensation incentive intensity of management supervisors, the key is to build up the system of diversified incentive and constraint structure, the system of sound performance assessment and the structure of normative and effective corporation governance.