Research On The Model Of Executive Compensation’s Distirbution In Monopoly Enterpirses

At present, the phenomenon of extremely high executive compensation inmonopoly enterprises such as petroleum, petrochemical, telecommunications, electricpower, tobacco, etc, has caused widespread concern of the public, the government andrelated departments have also given the high attention. Monopoly executives to highsalary problem has always been viewed as an important form of the social inequality,the rationality and fairness of the distribution of executive compensation have beenquestioned, how to curb the high wages and welfare of executives in monopolyenterprises, so it is particularly necessary to let the distribution of monopolyexecutives’compensation accept the test of social justice. As an important part of thedistribution of social income, monopoly executive pay allocated effectively andrationally, which can be conducive to gradually straighten out the distribution ofsocial income in China, and also be helpful to establish the scientific and rational, justand fair the system of social distribution. Meanwhile, under the circumstances of ourcountry’s economic transition and the market has not yet completed, it is of greattheoretical value and practical significance for responding actively to global economicintegration challenges and enhancing the competitiveness of the monopoly toestablish the distribution system of executive compensation which gives considerationto social justice but also conduce to enhance the competitiveness of enterprises.How to construct a scientific and rational, fair and impartial allocation system ofexecutives pay in monopoly enterprises, which is one of the hot issues concerned bythe current theory and practice. In this paper, comparative analysis, applicationanalysis and summarizes the induction method are used, the thesis is divided into fivechapters and use Game Theory as a theoretical research tool to study on thedistribution of executives compensation in monopoly enterprises. The thesis’train ofthought and innovation based on summarizing and analyzing the domestic and foreignliteratures, then using the human capital theory, the principal-agent theory, incentive theory to analyze the relationship of principal-agent and related incentive problems ofthe allocation of executives pay in monopoly enterprises, the paper also combinedwith the current situation and existing problems of allocation of executivescompensation in monopoly corporations to discuss the theoretical study about thedistribution of executives compensation, and assumed the variables of subsequentchapters. And then out of consideration for the fairness of the compensation allocationof monopoly enterprises, the thesis used monopoly adjusted basis to removemonopoly profits, at the same time introducing the performance of EVA to abandonthe traditional performance appraisal system. The distribution of monopoly executivespay considered a short-term and long-term incentive to make the singularity of theexisting salary structure become more rationalization, in order to prevent diluting thecontrol power of monopoly enterprises and losing state assets, the distribution ofequity incentive realized by the virtual stock options. Finally, the case was assignedby the China National Petroleum Corporation on the allocation of executive pay toanalyze and verify the new plan about the distribution of executive compensation,basis on this research, the paper also point out the deficiencies of the model. Throughthe above research the paper came to the conclusions and also pointed out theinadequacies of this study and the subsequent direction of further research in the endof the article.The innovation of this paper is mainly embodied in two aspects: First, theperformance evaluation of the executives of monopolistic corporations considered themonopoly factors. The second is that the distribution of executive compensation usedthe virtual stock options for the allocation of equity incentive to achieve long-termincentive. The deficiencies of this thesis mainly perform these following aspects: thespecific number of the monopoly adjusted basis is not clear, a specific plan ofimplementation and the amount of grant weren’t made on the incentive pattern ofEVA-based virtual stock options.