The Influence Factors Of Top Management Compensation In Listed Companies-Based On Structural Equation Modeling

The 21^st century is a knowledge economy and people-oriented age. With the coming of this century, the importance of human resource is shown especially day by day. In modern companies, as the most crucial and valuable resource, top managements determine enterprises' development trend and prosperity or decline. The compensation level is the most direct and primitive driver, and also the reflection of their own status and value. Therefore, the research on top management motivation and compensation is becoming a focus concerned by society. The objective of this paper is to explore the influence mechanism of all kinds of factors to top management compensation in our country's listed companies, in order to establish and complete a top management compensation system suiting to our country's background.On the basis of the review of domestic and foreign previous classical literatures and relevant theories and considering the specific conditions of our country, the article attributes top management compensation to three parts: cash payment, shareholding ratio and on-job consumer, summarizes seven factors influencing the listed companies' top management compensation, further brings forward a factor influence mechanism and determines measurement index of each factor.In order to measure the rationality of measurement index and factor structure, this paper conducts an empirical analysis adopting the approach of "Structural Equation Modeling" in two ways. First, it selects proper measures of factors by employing "Confirmatory Factor Analysis". Second, it reveals the mechanism that factors influence top management compensation by employing "Path Analysis".The empirical research conclusions are as follows: company performance, equity structure, top manager character, company size, capital structure and company trait have noticeable effects on top management compensation. The different effects are separated by company performance, acting as an intervening variable. Company size and top manager character have direct effects on top managements' compensation on one hand and indirect effects via company performance on the other. Capital structure merely influences top management compensation indirectly by company performance, while equity structure and company trait only have direct effects on top managements' compensation.At last, on the basis of conclusions, the paper provides some suggestions and looks forward to a further research for future.