The Difference Analysis Of Executive Compensations Between Financial Industry And Others

The executive compensation of financial industry is rising very fast in recent years, which make it great higher than the average level and the salary of employee and arouse the attention of the public. This paper analyzed the difference on executive compensation between Financial Industry and others from the influencing factors perspective on this background.This paper firstly reviewed the empirical literature of the executive compensation of financial industry and literature of the influencing factors of executive compensation, and then analyzed the theory of corporation management, principal-agent theory, human capital theory, tournament theory, theory of managerial power and rent extraction.Based on this, this paper brought forward ten hypotheses, and then designed the executive compensation model. Using 1613 listed companies of year 2008, this paper validated each factor's influence on executive compensation from empirical point, and it revealed that executive compensation is influenced by the net capital, return on equity, human capital, and average salary of employees, whether to issue B or H stocks, CEO duality, the share proportion of the first shareholder and the government and other industries factors.Then, this paper chose almost all of the listed companies of year 2007 and 2008 to analyze the difference of executive compensation of financial industry and others from the single influencing factor and the comprehensive influencing factors. It reflected from average proportion of executive compensation to salary of employees, the scale of the firm, return on equity, human capital, financial industry is the first among all industries. It reflected there was great difference between the expected and the real executive compensation. In 2007, the average top three executive compensation of the financial industry was 4081041 yuan, however, the expected was only 2130100 yuan. So the difference was 1950941 yuan, which was dramatically higher than other industries.Analyzing the difference on executive compensation between financial industry and others from the influencing factors perspective, which revealed there existed great differenc; This paper inclued human capital and average salary of employees in the regression analsis and revealed both influenced executive compensation. That are the two innovative points of this paper.Finally, this paper brought forward five policies based on the empircial results. Government need to restrict the level of the executive compensation, break the monopoly of financial market and establish the institution of increase of the executive compensation and the salary of employees. Financial firms must constitute effective incentive compensation system and put compensation committee into effect.