Study On Executive Compensation Of State-owned Listed Enterprises

With China's economic reform, State-owned listed companies has gradually grown up and plays an important role in national economic development. Facing the overall market competition and internationalization, when the state-owned listed companies in line with international practices, it also has many problems. Executive pay and incentives relates to both efficiency and equity arrangements, it not only links to business performance of listed companies, but also is affect by corporate governance. There are still no uniform conclusions in theory study and management practice. In accordance with the principal-agent theory, designing the contract which meets the incentive compatibility constraint is the key to solve the problem of executive compensation incentive in the case of asymmetric information. Because of the actual owner is not clear, the executives of state-owned listed companies can control the company and produce self-serving behavior.This paper consists of four parts. Firstly, paper states the background and significance of this research and summarizes the interrelated theory and the study of domestic and international. Secondly, it finds there are obvious regional disparities and industry differences about the executive compensation, through the statistics analysis about the data of 525 state-owned listed companies for the year from 2008 to 2010, the level of real estate industry executive compensation is far more than other industries. Most of the executive compensation is short-term incentive, the forms of long-term incentive such as stocks and options are scanty or just symbolic forms. Using the stepwise regression, the research of the executive compensation's influence factors discovers that executive compensation and company performance are not significant correlated, but the executive compensation and the scale of assets are positively significant correlated, the executive compensation and the scale of liability are negatively significant correlated. The performance-oriented executives'evaluation and compensation system of state-owned listed companies are not effective and need further improvement. Finally,the paper brings forward Policy and advice and points out the study's limitations that need future research for improvement.