Research On The Executive Compensation Legal Regulation Of State-owned Holding Company

Executives are the abbreviation of senior management persons, as the owner of the modern enterprise agent to run the company, executives over the company according to the agency relationship. In general, executives have obtained the remuneration in the operation and management of the company. But in practice, there exist contradiction between ownership shareholders and executives pursuit maximizing interests of their own, and because the shareholder dispersion leads to executive’s power enhancing and other reasons, executive’s power began expansion, and the problem of executive compensation unreasonable arise.As the important subject of economic operation, State-owned holding company has made outstanding contributions to China’s market economy development. But in the State-owned holding companies there exists special shareholding structure, which only the State shares is in the dominate position. Compared with the unreasonable executive’s pay of General Corporation, the factors of executive’s unreasonable pay of State-owned holding companies is more special, this specificity is reflected in the absence of owners of State-owned enterprises, as the ultimate owner of State-owned enterprises and State-owned legal person shares, all people can’t really.play the effective investor’s role, this is the system defects of State-controlled companies. Due to the absence of owner, as operators of the State-owned holding company, the power of executives become unfettered, in order to gain their own maximum interests, the executives at State-controlled companies search high salary appear.Since the market mechanism can not effectively allocate executive’s compensation, the state’s intervention is reasonable. State can take measures such as making laws to remedy the defects of caused by market failure, thereby correcting the unreasonable executive compensation of state-owned holding company. So how to correct the unreasonable executive compensation through legal and other measures, the premise is that we must clarify the problems of executive compensation in state-owned holding company, in practice, there are a series of problems such as the executive pay level of state-owned holding company rose rapidly, and the gap between it and staffs income becomes larger and larger, executive’s compensation has decoupled from their performance, executive’s pay decisions and oversight mechanism failure, lack of motivation and restricting factors, there exists implicit compensation, government’s control color too heavy and market mechanism is immature. When we found problems of executive compensation in state-owned holding company, we also need to analyze the existing legal regulation in our country and find out the problems, these problems are mainly include: though the number of normative document is large, most of their effect is low; the decision subject of compensation is absent, and this easily causes the insider trading; the evaluation mechanism of executive compensation is not scientific, the provisions are formality; supervision mechanism is not perfect, information disclosure system not sound.In order to solve the problem of executive’s unreasonable compensation, we must use legal regulation for the executive’s compensation of state-owned holding company. On the basis of analyzing actual situation of legal regulation in China and learning the experience abroad, especially Germany and the United States which the corporate governance experiences more successful. Finally, establish legal regulation system of China state-owned holding company’s executive compensation in accordance with the specific conditions in China. The concrete content includes: Perfecting the programs’ regulation of State-owned holding company’s executive compensation, strengthen the role of independent directors, remuneration Committee and the Board of supervisors on executive compensation issues, improving executive compensation incentive and constraint mechanism, perfect information disclosure system of executive compensation and reduce administrative control on executive compensation and make judicial correction for the unreasonable executive compensation.