Research On Restraint Mechanisms For Executives Compensation In State-Owned Enterprises

In 2009, the worldwide financial crisis gives rise to a cry for imposing restrain on executives'salary. Under the background of financial crisis, the domestic and foreign governments become to restrain the executives'high salary .Meanwhile, the fairness of executives'salary becomes hot spot.As for State-Owned Enterprises(SOEs), because the State-Owned Enterprises are fundamental to national economy, and executives lie in the core of the enterprises,so the role of SOEs'executives is very significant. But no one can deny the fact that the restraint mechanism for SOEs'executive is low efficient. Because of the ambiguity of SOEs executives'identity and lack of penalty mechanism, the earnings and risk that executives undertake is extremely asymmetrical. Therefore, while giving the executives incentives, SOEs must prevent executives from exposing the state property to risk to seek their own benefits, or taking the state-owned property as their own property. In order to restrain the behavior of executives, in recent years, the government has carried on a series of controls on the SOEs executives'salary. But this kind of government's administrative intervention has created a series of distortions and low efficiency. However, making further reform of SOEs, quicken the improvement of corporate governance and displaying interior mechanism's restraint function as well as consummating the exterior environment of laws in the process of consummating executives'compensation restraint mechanisms, is an ultimate outlet.This paper adopts the standardized method as well as empirical method to explore the issues of compensation restraint mechanisms of SOEs executives. The paper is composed of five parts: Firstly, we proposed the background and significance of selected topic and retrospected the domestic and foreign related research and made a summary as well as defined related concepts; Secondly, we reviewed the historical evolution of restraint mechanisms of SOEs executives'salary, and analyzed the related basic theory; Thirdly, taking listed State-Owned Enterprises as object and using empirical method, we analyzed the present situation of executives'compensation restraint mechanisms and proposed current questions that existed, in order to providing the reference for construction of effective restraint mechanism that followed; Fourthly, in view of the above question, by making use of the domestic and foreign beneficial achievements and linking it to our country's reality, we proposed suggestions from interior of SOEs for how to consummate restraint mechanism of Executives Compensation: establishing complete executive salary contract, improving Compensation Committee system, constructing multiple property right structure and strengthening the restraint function of bank and shareholders; Finally, From exterior of SOEs , we suggested that through reforming the way of selecting executive, consummating economic statutes and improving manager market to construct executives'compensation restraint mechanisms.