Commercial Bank Of Chinese Executive Incentive Compensation Mechanism

In the world financial crisis, a full-blown situation from the head of the 2007 China Ping Ma Zheming 66 million salary to the 2008 exposure of Guotai Junan"pay per million years", state-owned enterprise executives, particularly in the financial sector executive pay has been the focus of discussions between NPC and the masses in recent years. According to statistics, in 2009, per capita disposable income of Chinese urban residents was 17,175 yuan, but per capita net income of rural residents only 5153 yuan. In 2009, Chinese GDP was 33.5 trillion yuan, the per capita GDP was 25,769 yuan calculated at 13 billion people. The wages of executives of state-owned enterprises in China was 15 to 30 times per capita GDP. According to 2008 annual data, some experts study found that the Norwegian state-owned enterprise executives wage is 1.2 times the per capita GDP, Sweden is 1.6 times, France is 1.9 times, 1.4 times the United Kingdom, the United States is 3.4 times, 4.3 times that of Japan is relatively high. From this we can see that polarization of the income distribution system in China is unfair and unreasonable, such a distribution system become a serious threat to social stability of Chinese hidden danger. After pay sky-high price of financial executives become target of public criticism from Wall Street to China, the limit of salary for financial executives around the world have reached a consensus. Meanwhile, corporate executives pay is an important part of operating costs, to establish and operate a long-term incentives and improve corporate governance and financial management play a great significance to the company's sustained, steady operating.Starting from the analysis of incentive compensation, the study of commercial Bank of Chinese executive compensation incentive mechanism with a detailed analysis of executives incentive compensation status, and through a comparative analysis of domestic and international banking executives, recognizes that Chinese executives stimulated excessive was related to Zequan Li unequal. focused only on short-term incentives and was lack of long-term incentive, and my paper analyses the reasons from various aspects, then put forward countermeasures and suggestions for the management of executive compensation incentive of our commercial banks.This paper also recognizes that the incentive question for the theory of the banking sector at home and abroad always stressed executive incentives and inputs can be combined with the performance as long as the incentives in place, but did not dig deep-seated system defects existed in Chinese banking industry which caused Zequan Li unequal leading high executive pay and incentive unreasonable. In addition, past research tended to focus on company's own problems confined within the enterprise. However, problems in the banking industry has its deep historical roots linked to Chinese unfair income distribution system closely, so to solve the problems fundamentally, we have to find the reasons from the state and government. For this reason, we believe that elimination of government monopoly and policy implications, being linked to executive pay and business performance closely, establishing a sound banking executive pay system play a strategic role in improving the bank's internal governance structure, coping with global challenges and strengthening Chinese banking industry's competitiveness.