The Research On The Senior Executives' Salary System Of Listed Companies

Enterprises are the main body of the competition of marketing economy. But actually, the competition of enterprises, to some extent, is among their executives. Therefore, a fine salary system will be beneficial to constrain and encourage those executives, which will be in return helpful to the development of enterprises, or even the construction of the whole marketing economy system. Up until now, the economic system in China has been reformed for over 20 years, but the salary system of senior executives in some listed companies is still not perfect yet, which becomes more evident recently. In 2008, 60% decline of the large cap caused of the great woeful loss of many investors, whereas the income of those senior executives increased but decreased, some even with a salary of a fantastic level, which enraged many citizens in the society. Therefore, it is very urgent to prefect the salary system of senior executives in some listed companies of our country.The salary of senior executives in listed companies is not only constrained by the policy, but also influenced by the structure of stock ownership and director board. Some problems come out, such as the rapid growth in the pay of listed companies'senior executives, the great gap between the pay of different industries'senior executives and the low degree of companies'performance-related pay. These problems are related with the senior executives'own issues, government management issues, legislative issues, enterprises own issues, as well as the aspects of society issues. To analyze these from the system level, there are mainly the following issues existed in the current pay system of Chinese listed companies: the unreasonable system of corporate governance, the incompletion of executive pay incentive mechanisms and the immature of information disclosure of executive compensation systems. Through the deep analysis of the problems existed in the senior executives'salary system of listed company, it will help us to improve the system in the future. Therefore, to perfect the pay system of senior executives in Chinese listed companies, we have been offered some suggestions that we should improve the system of independent directors, regulate the operation of the Remuneration Committee, perfect the pay incentive mechanisms in listed companies which are suitable to Chinese companies , build the equity-based incentives for managers'market, optimize the information disclosure rules, and strengthen the regulatory system for the disclosure of information.