| In the modern corporate governance that Separation of the Right of management and property rights are the main operations, executive compensation is always one of the important topics discussed by domestic and foreign scholars. Recently, highly paid issues among executives of listed companies in China are more severe, especially at the period of economic crisis. At that time, China's enterprises executive compensation can not be eased, insteadly, some ones in the case of sharp drop in performance are still paid to huge salaries, which aroused widespread social concern. In 2009, the central six ministries jointly issued " guidance of further standardizing compensation of management of central enterprises", which standardizes the scope, basic principals, salary structure of executive compensation of central state-owned enterprises in China, and also emphasizes a combination of government oversight and market control, indicating that executive pay issues have been attached a great importance by relevant departments. According to optimal contract theory, corporate performance largely represents the executive's level of effort. Consequently, it is a good way to motivate management to perform on behalf of shareholder value as a basis for determining executive pay. But in fact, because of shortcomings in corporate governance and the enterprise's prestige of executive, it could be a continued expansion of executive power. Within more powerful management, executives have more ability to pay a certain extent in the compensation structure design, and have an impact on the development of their salaries controlled by Board of the company. For our present point of view, it seems like that executive pay is not highly correlated even no matter to the performance. However, this conclusion is drawn mostly by virtue of the individual samples or the observer's subjective judgments. Actually, it is question about "Whether the majority of listed companies also exists this phenomenon? Whether the remuneration of executives played a role in the development process? Whether performance correlated to pay and have an impact? As a Breakthrough Point, this article is aimed to verify the relationship between executive pay of listed companies and performance, and the existence of the enterprise "power manager" effect, and in accordance with the conclusions to put forward to some suggestions.this essay that summarizes present theories and existing literatures, with help of some statistical software like SPSS and EXCEL, to analyze 2009 annual empirical data of A-share listed companies on Shanghai and Shenzhen share market. The analysis mainly focuses on the following three aspects:(1) relationship between executive compensation and corporate Performance; (2) effect of management of power on level of executive compensation; (3) impact of the power management on the sensitive of management performance and executive compensation.PartⅠ:Introduction. According to existing theory and the actual situation of China, putting forward the significance of the topics, and to introduce the main contents, research methods and innovation point of this article, and to define a clear scope of this paper, involving explanations on ambiguity of some concepts simultaneously.PartⅡ:Literature Review. Firstly, introduce the research of domestic and foreign scholars in related fields of study. Including research on influence of manager power on executive pay, and makes evaluation on present research, and finally puts forward to the support and inspiration of existing literature for this study.PartⅢ:Theoretical analysis and hypotheses. According to the above literature review and this paper the definition of the power to managers, this part will put forward, together with the combining theory with hypothesis in theoretical analysis of this paper put forward the process of five assumptions. PartⅣ:analysis design. Four major procedures have been preceded such as data sources and sample selection, variable definition, model building and empirical analysis. During process of empirical process, it is firstly to conduct the overall analysis by using descriptive statistics on executive pay and other listed companies in China, and then to conduct regression verification to this model aimed to verify the relationship between executive pay and performance, and impact of management power. In the process of further analysis, the sample is divided into state-owned enterprises and non state-owned enterprises partsPartⅤ:Conclusions and recommendations. This part summarize the analysis method based on the first comprehensive four-part, and then put forward to recommendations for improvement combined with the existence of China's listed company specific issues, which can provide a reference of measures to improve the incentives for executives of listed companies. Finally, this study describes the limitations of this analysis and holds a expectation..The conclusion is that executive pay and corporate performance has significantly positive correlation. Executives will through the managers power in some ways affect salary, influence the correlation of compensation and performance. Specific for, CEO duality and ownership structure are the effects of executive pay level, executives can use this power to improve individual salary; executive with stronger power tend to use earning rigging to entrench performance compensation, improving the sensitivity of the compensation and handling performance, reduce compensation and the control performance of sensitivity, the greater the power, the managers through manipulation of performance to get compensation surplus of the higher the amount.Reasonable salary incentive can not only save cost for shareholders, will form an effective incentive effect of executives, therefore, the enterprise should set up a reasonable pay plan, raise executive pay and the correlation of enterprise performance. Based on this research, the author thinks that, finally found that Chinese enterprises should strengthen performance in executive pay compensation in formulating the action to improve the enterprise performance evaluation in executive pay, according to the proportion of the enterprise's own characteristic and establishing a scientific and reasonable performance evaluation system. In salary structure and long-term equity incentives introduced gradually, make the decision of executive way more long-term interests of shareholders. Continue to improve the enterprise the independent director system, strengthen independent director in the judgment and decision making of independence, through the external people power to managers in supervision and restriction. In addition, promote employment mechanism, the marketization of executives to executives behavior and ability to put pressure on can also limit managers, senior executives incentive power shareholders benefit maximization as the principle efforts. |
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