SME Board Of Listed Companies Executive Compensation Factors

Foreign scholars had begun to study influence factors of executive compensation from the1920s. For many years, scholars have never stopped this research, even to this day, they expandthe extension of the study outwards continuously. Why is there such a result? Firstly, executivecompensation is an important part of the company’s whole compensation system, and itsscientificalness and rationality directly affect the fairness and operability of the compensationsystem, and it also serve as a guide for ordinary staff compensation system at the same time.Secondly, with the continuous development of economic globalization, enterprises are faced withthe complex and volatile business environment, the qualification requirements and managementabilities of the executive must be greatly improved, and following the old executive compensationsystem can’t meet the ever-changing environment. Thirdly, even though the study of influencingfactors of executive compensation has yielded fruitful results, many researchers use differentapproaches and come to different conclusions. In short, the study of influencing factors ofexecutive compensation is in the way of continuous exploration, and in the next period of time, theresearch may be still in the blowout state.The study of influencing factors of executive compensation of listed companies in China’sSME board has certain representativeness. Firstly, the formulation and implementation ofexecutive compensation system in listed companies in China’s SME board are more flexible, sothe conclusion of the study is more practical significance. Secondly, listed companies have morefinancial capacities and opportunities to provide protection for the formulate and improvement ofexecutive compensation system compared to non-listed companies. The listed companies inChina’s SME board can be used as a perfect model for study of the influencing factors ofexecutive compensation. Scholars come to differences conclusions by using different methods inthe existing research. Some researchers chose qualitative research, such as interviews, the DelphiMethod; some researchers use quantitative research methods, such as questionnaires, researchingon cross-sectional data. The quantitative research is more scientific and persuasive. The majorityof existing studies choose the traditional ANOVA or regression analysis which has some defects.In this paper, we use hierarchical linear model which has widely used in the field of education andpsychology to study influencing factors of executive compensation, and we hope to be beneficialto the study of the problem.This paper firstly reviews the research background and meaning of the influencing factors ofexecutive compensation, and combines with the principal-agent theory, human capital theory andincentive theory to introduce related concepts, processes, and conclusions of influencing factors ofexecutive compensation. Influencing factors of executive compensation are divided into two hierarchies by the paper’s summing up and expand. This paper then builds a hierarchical linearmodel, analyses scientifically and comes to an objective conclusion. This paper selects the data oflisted companies in China’s SME board which disclosed in the Annual Report from2006to2010to confirm that level of education and gender have close relationship with executive compensation,and some individual factors and organizational factors have significant effects on executivecompensation. Furthermore, this paper also confirms that part of the individual factors play amediating role between organizational factors and executive compensation, and part of theorganizational factors play a regulatory role between the individual factors and executivecompensation. Finally, this paper puts forward some relative suggestions.