Empirical Research On The Executive Compensation Level And Structure In Chinese Listed Companies

Compensation system is one of the most important factor of the enterprise management. Though the reform of economic system have being on for about 20 years, the frame of modern enterprise system has roughly set up, executive compensation incentive system,especially in stated owned enterprise is still far away from the request of market economy. How to set up effective encouragement and restraint mechanism and to arouse the enthusiasm of executive is an important problem.First,the thesis reviews the theory of executive compensation and summarizes some important factory to the executive compensation, such as firm performance, firm size ownership structure and board structure; then this paper analyzes the situation of executive compensation and compensation structure in listed companies in China.The empirical study of executive compensation in Chinese listed companies in 2002-2004 concentrates on compensation amount, compensation structure, and the incentive intensity of compensation with the statistic method of line regression. From the empirical researches, we find a significant positive association between executive compensation and firm performance, firm size. The lower the top blockholder owns, the higher the compensation get. The proportion of independent directors on a board and the presence of remuneration committees have no significant effect on the level of executive compensation. The pay performance sensitivity of the executive in our country is very low, and it has no association with the firm performance. The proportions of equity incentive have positive association with the company performance and size. The last chapter introduces the conclusions, innovations and further study directions of this thesis.In China the research of executive compensation mostly attempt to demonstrate the correlation of performance and compensation. In fact, ownership structure and board structure are more direct factors. An innovation of this thesis is that we analyze the relation between the board structure and the executive compensation.