An Empirical Study On Contributing Factors Of Executive Compensation Of Listed Companies

Along with the establishment of modern enterprise system in the country and the release of executive compensation data,the issue of executive incentive has become a hot topic for the academic and the practice circle. Compensation incentive as a most important mean to motivate executive has been a hot discussion for scholars. A reasonable compensation incentive mechanism can effectively improve the working enthusiasm and efficiency of executive; avoid agency failure, brain drain, and other negative phenomena. 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.This text defines executive compensation of the listed company at first, summarize different definitions. Later reviewed the relevant basic theories of executive compensation and result of Empirical Study, and thus summed up the major factors which impact the levels of executive compensation, including baseline factors, governance factors and contingency factors, then analyzed the current situation of the executive compensation at present: Further increase the gap between executive pay and shown clear signs of industry and geographical differences; The compensation level is influenced by enterprise's ownership property. Ranked by an analysis of executive pay found that high-paying business mainly concentrated in the financial sector, while the low concentration of almost all enterprises in the less developed regions.This thesis selected 2007 companies listed in Shanghai and Shenzhen as a sample, using EVIEWS software to make an empirical analysis of executive compensation impact factors .The outcome indicates that: First, the analysis of the overall sample, listed companies'executive pay has a positive correlation with corporate performance, firm size, executive age, as well as two-level executives. Executive pay is also a positive correlation with managers whether they are holders of shares. Executive pay has a negative correlation with Concentration of ownership and the proportion of state-owned shares; second, the extent of area executives developed a significant impact on pay and the more developed economies of the region pay the higher executives. However, whether the company is manufacturing of executives do not have a significant impact on pay; the third, the central enterprises is slightly lower than the average level of executive pay. At the same time, in addition to company size, company and industry of the region have a significant impact on pay, other variables are not significant. Central enterprises pay less than inspired, and are subject to market and other factors. Fourth, this article further analysis of different samples, both part-time has not brought very good incentive effects; operators a combination of short and long-term incentives of the listed company of its operating performance is superior to other incentive situation; developed regions executive pay by company size and performance, while less developed regions of the executive compensation and a significant positive correlation of age; the low percentage of companies that may exist with the operator's "internal control" phenomena, the relative concentration of equity cases, operators are more complex incentive compensation.