| With the coming of "knowledge-driven" economy in the new century, the high-tech enterprises have played a more and more important role in the economy. In order to develop them, powerful and effective remuneration measures should be adopted for the top executives. By now, there are almost 200 high-tech listed companies in China. As public traded companies, these firms still face the "agent problem": Shareholders rely on to top executives adopt policies that maximize the value of their shares. Like other human beings, however, top executives tend to engage in activities that increase their own well-being. Since goals of shareholders (principle) and executives (agent) are not always congruent, shareholders have to sign an incentive compensation contract with executives to combine their interests together. There are lots of empirical literature on executive compensation aboard. However, domestic research on this topic is just at the threshold. To remedy the vacuum in china, we investigate the remuneration of top executive in the high-tech listed company by using public data. This paper aims to examine the factors that affect executive compensation of the high-tech listed company, as well as the incentive effect of their compensation policy.This paper is organized into five sections:The first section provides an overview of the literature on common executive compensation and on incentive mechanism of high-tech enterprise. This part shows a clear picture of the current research situation. It also provides us a comprehensive reference to find out influential factors on the executive compensation. The second part analyses institutional background. We discuss about the operation characteristics of high-tech enterprise, relevant regulations and beneficial policies, the overwhelming problems in Chinese listed company and historic developing process of incentive schemes for the top executives.This part gives us further understanding of the high-tech listed firms and their compensation policy.We present the compensation model in the third part. Given the wide range of factors that have been considered in previous literature, and based on the characteristics of the high-tech listed company, we propose and categorize the influential factors on compensation as following: (1) performance; (2) operation features such as size and stock risk; (3) corporate governance including chairman/CEO duality, size of board, independent director, executive appointment, paid chairman; (4) stock structure including concentration of shareholders, foreign investor, internal shareholding and the state control; (5) long-term debt; and (6) other factors such as industry and area. According to above factors, we proposed hypothesis on the base of theoretical analysis.The fourth and main section describes the data and provides empirical results. Firstly, we test the relation between compensation and the influential factors. The empirical findings show a statistically significant effect of the accounting profit performance on executive compensation. But the market performance and the cash flow performance do not seem to influence the compensation. Consist with other research, firm size is significantly and positively associated with executive pay. Firms with highly concentrated shareholders tend to pay their executive less than average. Top executive in the electronic-information industry are better paid than those in other industries in a significant way. Firms located in the eastern provinces give their top managers higher compensation compared to those in the western area and mid-region. Secondly, we divide the 162 companies into two groups by their incentive schemes and examine the factors affecting the executive pay respectively. As expected, there are obvious differences between the empirical results. Firms with performance-related compensation schemes pay their top executives according to the performance; when the firms are more controlled by the state, theirexecutive will get lower compensation; level of executive... |
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