Interest Balance And Law Rule On Compensation Of Executive Directors And Officers In Chinese Listed

In modern society, company becomes main organized form of enterprises.Listed company is the typical model representative of the incorporatedcompany in which the ownership and the control powers on the companyseparate mutually, so the executive directors and officers controlledthe company gradually. With the development of the management practicein modern company, the compensation of executive directors and officersis not only the pay of their work, but also is the incentive means andallotment system of interest between shareholders and the executives.Compensation of executive directors and officers is directly related withtheir income, but it usually becomes the way of damaging the shareholder'sbenefits.After analyze the experience study on executive compensation inChinese listed company, we can knowledge the essential of the problemabout executive compensation is the executives gain too many andshareholders can't keep within limit it. Especially on the decision systemon executive compensation, the shareholders' power is weaken actually.But the legal system only exert social security function, so we can'tprotect the shareholders' interest.Company law must help to increase efficiency of companies, and thelaw must balance the interest in society. So I think the compensationsystem of executives in company law must help to decrease the "agency cost"and balance the interest between shareholders' and executives'. So thatthe standard of interest balance must help to protect the interest ofshareholders, cause the shareholders who is place in the actual poorposition bear the risk of running company lastly. The legal system oncompensation of executives must run by the adoption in advance of systemarrangement about the decision of executive compensation. Afterconsidering the experience in foreign country, I put forward todefinition the executive compensation clarity, enhance the disclosureabout their compensation, strengthen the independent directors and thecompensation committee definitely, and appropriately extendshareholders' power to make decisions about the compensation of executivedirectors and officers.