The Study On The Legal Regulation Of Senior Executive Pay In State-owned Enterprise

Generally speaking, it is reasonable for a senior executive in an enterprise to enjoy a high salary. However, just because a modifier,"state-owned", precedes the term,"enterprise", and additionally, because the fact that senior executives in a state-owned enterprise are mostly appointed by issuing administrative order, this more or less makes high salaries for senior executives complicated and mysterious. Ever since the frequent occurrence of the incidents of "sky-high salaries" for senior executives in state-owned enterprises, there has been no end of discussions and arguments about such phenomena among people from all walks of life, with the intention to realize through legislative regulation the linkage of high salaries for senior executives in state-owned enterprises with corresponding job performance, so as to achieve the aim to check irrational payment. However, this method can’t completely solve the issue, at least in the public welfare state-owned enterprise. In generally, the enterprise performance is mainly reflected by the profits of enterprises, and the quantity of corporate profits mainly depends on the executive management ability. But, from the perspective of state-owned enterprises, the linkage between payment and job performance cannot help to solve the irrationality of high salaries for senior executives once and for all. At least, this is the case with the state-owned enterprises concerning public welfares. In general, in market competition, corporate performance is mainly embodied by the profit it makes, and how much profit largely relies on the managerial capability on the part of the senior executives. But owing to the peculiarity of state-owned enterprises, factors that affect the corporate performance may also include the monopoly position, the scale, political connection and other factors attributive to those who are not senior executives. Therefore, the unified practice of "payment by performance", regardless of the distinctions between different categories of state-owned enterprises, can also possibly contribute to the rationalization of irrationalized payment. On this account, in exploring legal regulations about high salaries for senior executives in state-owned enterprises, especially in defining the key point of irrationalized payment, we should realize that irrationalized payment may be the ensured stable income for the senior executives owing to insider control or the unjustified wealth attributed to such factors as monopoly profits and enterprise scale which has nothing to do individual contributions. So, although the cases of high salaries for senior executives in state-owned enterprises are just the same, the regulatory principle of "the same but there is difference" should be carried out. Aside from needing sound internal governance mechanism just as a competitive state-owned enterprise does, a state-owned enterprises concerning public welfares should at the same time pay attention to effectively eliminate the factors that affect the authenticity of performance, such as, monopoly, scale, political connection while designing the salary system and evaluating job performance. That is to say, market return cannot be merely used to measure the achievements made by factors like monopoly. On the one hand, full stimulation should be exercised to guarantee the reasonable income of senior executives; on the other, excessive stimulus should be avoided in order to limit the unjustified payment of senior executives. At the same time, both entity regulations should be abided by, and procedural control should also be paid due attention to.