Study On The Legal System Of Restrciting Executive Compensation

This article explores the appropriate approach to the regulation of public corporations executives'execessive compensation.The first part of this article introduce the status of executives'compensation.It is pointed out that the excess high level of executive compensation depart the interest of shareholder.With the framework of agency cost theory,this part describe the evolution that compensation system become part of agency cost.In this part,the core issue is that what is the appropriate approach of law to this problem.Chapter two discuss the detail reason of the forming of execessive compensation,and conclude that the consummate of the company interior government as well as the exterior government mechanism is a effective approach to the regulation of public corporations executives'execessive compensation.Chapter three discuss the constant response to the problem regulation on compensation.This part retrospect the process and the effect of regulation on the remuneration of executives of state-owned enterprises.Legislation on the level of compensation confronts many challenges such as its legamacy and effect.So direct regulation is an mission impossible.Meanwhile,this chapter probe into whether tax rule can cap payment sucessfully.The practice of American tax law demonstrate that tax law can not bring obvious effect.Tax law can even bring out some adverse effect.Tax law can not bear the overweight burden.After that,this chapter disscuss the reform of the discolsure of executives compensation.The important reason of agency cost is information asymmetry between shareholder and executives.One of the fundmental measure to elimanate information asymmetry is the discolsure of executive compensation.This chapter discuss the deficiency of the exsiting disclosure request,and make some suggestion on the improvement.Chapter four focus on the effect law take on enhancing internal control mechanism of corporations.Law can assist shareholder strengthen their oversight on board of directors of similar organ.Furthermore,Corporate law can help shareholder heighten the capability to control the general shareholder meeting.Chapter five is the conclusion of the article.Through the above analysis,we reach the conclusion that Although Corporate law is to help market machanism rather than take the place of market,but with the disfigurement of market forces a more important way to control execessive compensation is of internal control mechanism of corporations.