The Research On Legal Regulation Of Senior Executives' Compensation Of Listed Company

The senior executives of listed company refer to the director, supervisor and senior manager(including general manager,vice manager, secretary of the board of directors,senior accountant,chief engineer.etc.). Senior executives' compensation refers to all earnings from wages,bonuses, welfare,duty allowances,consumption of position,stock dividends, stock option incentive plan.etc. With the separation between ownership and control right of company, company senior executives' compensation and related problems have been appearing, it is necessary for law to regulate it for protecting the shareholders'interests. The legal regulation of senior executive's compensation of listed company established by European and American developed capitalist countries, investigating the different legislation in nations, it's found that the legal regulation is practically mainly reflected in four aspects:configuration of compensation decision, compensation disclosure, tax regulation and judicial review. In configuration of compensation decision, the general meeting of shareholders is endowed with the power to make decisions about the directors'compensation, the management personnel's compensation is proposed by the salary committee of the board of directors and is decided by the board of directors in British and America. Because of the unified system of corporate governance model in Germany, the compensation of the directors and the management personnel are decided by the board of supervisors, under special condition by the courts. In compensation disclosure, each country has specialized skills to the object, the content, the way of disclosure and the legal liability of disclosure violation. In tax regulation, presently only American tax law regulates "Golden Parachute" income of senior executive and its exemption, however, it gets the opposite of what one wants from the consequence of regulation and the purpose of decreasing senior executives'compensation has not been achieved. In judicial review, senior executives'compensation is protected by business judgment rule; the courts usually keep cautious attitudes and it is hard to construct and hold examination standard, and it is not ideal from the result of reviewing. Our country is at the primary stage of constructing the legal system of senior executives'compensation of listed companies, during which many compensation problems also have appeared, such as compensation unrelated with company's performance, unreasonable compensation structure, non-independent compensation committee and the inadequacy of compensation information disclosure. To a great extent, the appearance of compensation problems is attributed to the lagging of legal regulation. The laws and regulations of our country exist legal regulation problems in three aspects of senior executives'compensation decision, compensation disclosure and judicial intervention,perfect compensation decision system, adequate information disclosure system and restricted judicial intervention system can perfect the legal regulation of senior executives' compensation of listed company in our country.