The Research On Executive's Incentive Compensation Mechanism Of Private Enterprise In China

As an important strength in our national economy, private enterprise has obtained the huge achievement through more than 20 years development. Moreover, in the economic development, it has displayed an indispensable function and the public economy could not be substituted. It has fully aroused producer's enthusiasm, promoted the productive forces development, absorbed the massive employment personnel in city and countryside, and reduced society's pressure. However, along with the expansion of the private enterprise and the production of the manager social stratum, people discovered the modern private business management service can not only be to worker's management, more importantly to manager personnel's management. Because the expansion of enterprise and the appearance of the manager stratum has caused the separation of the property rights and the management rights. And the separation of the property rights and the management rights has brought out a realistic problem, namely the conflict between the owner's interest goal and management's interest goal. As different people in the enterprise pursues different interest goals and the manager personnel have actually the enterprise domination, the manager personnel possibly encroach upon the owners' interest by using the right of management. In order to protect the owners' interest, people proposed a question of how to stimulate the high level manager, namely the owner adopts what incentive measure, can cause senior manager to pursue the owners' interest to maximum extent while to satisfy their own interest. This is also how to realize the accommodation between the owner and management.However, the top executive incentive of private enterprise is a complex engineering system. It not only needs to consider the internal situations and the external environment, but also consider the executives' own characteristics. Analyzing the development in our own private enterprise and the economic environment which the private enterprise faces after WTO accession, by instructing the incentive theory from the foreign enterprises, and coalesced with the characteristics of the private enterprise and the existing question of the executive incentive compensation mechanism, the article discusses one kind of top executive incentive model which suits the Chinese national condition effectively, to provide some help to private enterprisers who are puzzled deeply by this kind of questions.