Legal Control Of The Payment Of The Executives In The Listed Companies

Since 2007, with the substantial increase of executives'salary from the number of listed companies, especially from financial industry, the problem that executives get"overpaid"is highly concerned by the society. The original purpose of incentives for executives of listed companies is to coordinate the conflicts between owners and executives, and to reduce agency costs, to maximize the shareholders'equity. However, due to the high separation from the ownership and control in the listed company, owners and managers pursue different objectives and there is information asymmetry existing; and also governance structure of listed companies in China is not sound enough; with the impact of executives'control and manipulation of the board of directors or compensation committee, plus the improper design of incentive-making procedures; consequently, executives can determine their own salaries and compensation, and conduct their own performance evaluation; in addition, the existence of executives ethical issues, leading to a variety of implicit and explicit corruptions; it lacks of supervision from policy making to implementation, also it lacks of supervision about the board of directors and independent directors, and the shareholders cannot participate. Therefore, there are many problems occurring and existing for the issue of incentive and pay for executives in the listed company. It is urgent to strengthen the control in this area by law.The control of the wage for executives in the listed company can be carried on in the following way: First,the system of the wage of executives and the patterns of legal control;second,legal control under the stages of listed company;the last is the legal control under judicial way.As to the first aspect,by researching on the system of the wage of executives in the US and the patterns of legal control home and abroad,it reached the conclusion that the system of the salary of executives in our country should be :basic salary + EVA + welfare plan + special treatment; while,to improve the patterns of legal control must take the relative system in the US and German as references.On the stage of listed company,according to the research on overseas wage -making procedures,rights for wage deciding should be handed to the wage committee under directorate. Otherwise,the control of that procedures itself and the governance structure of the company should also be enhanced.Although the "Company Law" Article 152 has already established a system of shareholder derivative litigation, but the specific operation seems not very sound. For that consideration of derivative litigation system (including the party system, derivative litigation proceedings against the former request), there is a need for shareholder derivative litigation incentive system, to actively exercise their shareholder derivative litigation the right to appeal, to protect company and their own interests.