A Research On Compensation Incentive Mechanism Of Senior Executive In Chinafs State-owned Enterprises

With the separation of ownership and management, there comes a principal--agentrelation in the modern enterprise system. And because of the information asymmetry,incentive incompatibility, responsibility right etc., it is crucial to make appropriateincentive to managers who act as the agent in the relationship. In which compensationincentive is an important aspect.However, with the current “horrifying salary”, the country state-owned enterpriseexecutive compensation incentive is faced with a lot of doubt and attack. As resourceforestall sex and policy preferences, profit of country state-owned enterprise does notdepend solely on the competition, so high salary incentive to the chief executives instate-owned enterprises is not reasonable as the other companies’ chief executives, whosemanagement decision plays a decisive role in the company. There exist a lot of problemsof the high executives’ salary.This paper is committed to establish an executive compensation incentivemechanism, which make executive compensation and incentive element is closely linked,to guarantee the incentives, competition and fairness of executive compensation.Therefore, with incentive principle of the internal consistency, external equity andidentifying individual contribution, this paper analyses the executive compensation dataannounced by state-owned listing corporation in2011and compare with its internalemployee compensation, non state-owned enterprises, China’s per capita GDP executivecompensation and corporate performance. And according to the existing problems, weverified the factors that influence the state-owned enterprise executive compensation. Onthis foundation, we finally put forward the construction plan of executive compensationincentive mechanism.