Study On Contributing Factors Of Senior Executives Compensation Of Listed Companies In Hubei Province

The problem of executive compensation derived from modern enterprises′separation ofownership and management，inconsistent between the interests of the owners and managers, andthe presence of asymmetric information. The complexity and its uncertainty of the modernbusiness environment make the problem more serious. How to establish and improve theincentive system for senior management to achieve effective incentive for managers and finallyreduce agency costs have been the problem Chinese enterprises need to solve. This paper aims todesign research variables, do a more comprehensive and systematic empirical analysis of factorsaffecting executive compensation, than based on the model results, the corresponding policyrecommendations can be made. There will be a certain practical significance to improve themanagement system of listed company executive compensation and better play of seniormanagement in the enterprise.This paper is on the foundation of principal-agent theory, the manager theory, manager ofpower theory, human capital theory, as well as tournament theory, combined with the relevantresearch results at home and abroad, analyzing the influencing factors of executive compensationfrom corporate performance, firm size, structure of corporate governance and capital. Then, adescriptive analysis of the status of executive compensation of listed company in Hubei Provincewere done by selecting the69listed companies in Hubei Province as samples. Later, from theempirical point， this paper advances seven hypothesizes，constructs a multiple linear regressionmodel. The concrete steps are as follows: take the executive compensation as the dependentvariable, the performance of the company, the size of the company, the chairman and generalmanager of two hats-one state, the proportion of independent directors, board size, the proportionof state-owned shares, the proportion of executive stock ownership, equity balance degree andcorporate capital structure as independent variables, the model were analyzed by taking themethod of the correlation analysis and multiple linear regression. The empirical results show thatChinese listed companies’ executive compensation is influenced by many factors. Corporateperformance, enterprise-scale, two hats-one status and equity balance degree of executive payhave a significant impact; negative correlation is existed between the proportion of independentdirectors, the proportion of state-owned shares, the proportion of executive stock ownership andexecutive compensation, but the correlation is not significant; while the positive correlationbetween the size of the board, the asset-liability ratio, and executive compensation is notsignificant. Finally, according to the empirical results, four policy recommendations to optimizeexecutives incentive pay system were made, and the shortcomings in the course of the study waspointed out as well as a outlook for the future executive compensation research.