A Study On The Management Of Executive Insurance In State - Owned Enterprises

In recent years, there are lots of phenomenon of extravagance and waste of some state-owned enterprises’ executives. Some executives have too high on-the-job consumption, which gets attention from all walks of life. The perk will reduce the enterprise value and make state assets loss. Currently, on-the-job consumption phenomenon is very serious, so the excessive on-the-job consumption problem should not be ignored. Since 18 th CPC National Congress, governments put efforts to tackle the problem of luxury style and published "eight rules" in December 2012.The government ban using public fund of enterprise to pursue personal benefit, however, some executives still use on-the-job high consumption for private disposal such banquet at public expenses, comfortable travel and so on.In the meantime, after making an inspection tour of 25 large state-owned enterprises in the first round, the central inspection group found new forms of duty consumption in the disclosed cases that breaking eight rules, i.e. 9 state-owned enterprises have excess duty consumption by expanding construction, investing projects, etc. Therefore, from the perspective of compensation incentives and business expansion, it’s quite necessary to conduct a profound research on how to manage duty consumption of executives in state-owned enterprisesThis paper based on the Principal agent theory, Incentive theory and Equity theory, it selected the data of the Chinese A-share listed company’s annual report 2010-2014 as the study sample, a total of 1353 data. We use the method which combined theoretical analysis and empirical study to analysis the relationship between perk and enterprise performance, the relationship between compensation incentives, enterprise expansion and perk.This thesis has several findings as follows: in government owned enterprises, perks and enterprise performance are negatively and significantly. Besides monetary and stock-based incentive compensations are negatively and significantly associated with on-the-job consumption. On the other hand more corporate invest will bring more perk. According to the research results, the thesis put forward relevant policies and suggestions from four aspects, including strengthening external supervision, improving compensation system of state-owned enterprises, perfecting governance structure of state-owned enterprises and establishing strict laws and regulations, to prevent executives from “wanting to do”, “willing to do”, “being able to do” and “being bold in doing” duty consumption and other excess self-interested behaviors as much as possible.