Legal Regulation Over Executive’s Compensation In China’s State-owned Holding Company

As the development of the socialist market, the company undoubtedly becomes thedominant mode of business enterprise of our country. The company not only has becomethe way of property keeping, but also already has become the means of our countrysocialist organization of economic life. For each country, Listed Company dominants thedevelopment of stock market of the country, and also becomes main force ofnational.economic development. All of listed company, about two-thirds of the listedcompanies is state-owned holding listed companies, and the special properties of thestate-owned shareholders’ ownership has far-reaching influence on the state-ownedholding listed companies’ corporate governance. And its specific ownership characteristicof the state-owned shareholders has a particular effect on the corporate governance oflisted company. At the same time, present modern company system is in the state thatownership and management right are split to a very great extent. Executives, including thedirector, manager and so on, master the real control power of the company. As a result, asa kind of incentive system, executive compensation system has appeared. Executivecompensation should be set to eliminate the contradiction between the executive andshareholders, and pursue their own interests at the same time to realize the greatestshareholder value, however, in our country, there exists large shareholders control andinsider control in State-owned holding, and executive order means appears in marketwhich conflict law of value. The executive compensation has been far from the final set ofpurpose and corporate governance rules. Therefore, it must regulate senior corporateexecutive’s compensation in State-owned holding Company and optimize the companymanagement environment.This paper takes the information about laws and regulations of executivecompensation in the state-owned listed company of our country as starting point, focuseson that the specific state-owned property, which shareholders of state-owned listedcompany in our country have, react on the executive compensation system andeffectiveness of legal regulation on this property. At first, this paper keeps an eye on thetheoretical basis of laws and regulations of executive compensation in the state-ownedlisted company of our country and analyses its current situation and the reason. It alsoinvestigates the information about the laws and regulations of executive compensation inlisted company oversea and summarizes its advantages. At last it presents the advice andassumption for improving laws and regulations of executive compensation in the state-owned listed company of our country.