An Empirical Study On The Determinants Of Chief Executive Officer Compensation

Along with the build of modern enterprise system and the further separation of ownership and management of the enterprise, As interest of owner and manager of the enterprise is inconsistent, the agency cost caused by has became one of the largest obstacle in developing the company. More and more CEO corruption have already caused attention from public and accountancy field. CEO compensation is a core topic in corporate governance, and also is one of the valid measure of solving agency cost. Research on CEO compensation mechanism can help to ferment scientific salary structure, reduce agency cost and raise profit of the enterprise. Thus, many scholar studied CEO compensation from different aspects. But because many aspects influence CEO compensation, scholars study CEO compensation and enterprise from different aspect may lead to different research result. It is difficult for them to reach a same result. It is not difficult to see that facts influence CEO compensation is not single. Enterprise achievement, scale, industry, capital structure, district, stock option etc. may have influence on CEO compensation. Just study one certain or several influence factors but neglect other factors may cause deviation of the result. Thus, this paper give a comprehensive analyzes on CEO compensation with the purpose of giving certain suggestion to build a scientific CEO compensation structure.In this paper, we based our study on previous research and theoretical analysis. After finding factors that may have influence on CEO compensation, we making empirical test and found that CEO compensation has significant positive correlation with sales amount of the company; CEO compensation also related to profit and asset; the correlation between compensation and industry is smaller than the correlation between compensation and district; compensation is negatively correlated to owner's equity; the ration of shares owned by CEO is small and stock stimulation do not have significant effect. From the result we can see that CEO compensation in China is becoming with reason but still has certain aspects to be improved.