Monopoly, Compensation Regulation And Monetary Compensation Of Executives

Since1998, China began to disclose executives compensation, executives compensation was being widely concerned by domestic and foreign scholars and social. As the core of company’s business management, the executives’value of human capital plays an important role to improve corporate performance. But recent years, with the restructuring of listed companies and the progressive development of the capital market, the number of executive compensation is becoming more and more amazing,after the announcement of some listed companies’ annual report, the huge executive pay attracts the attention of public media, and caused some investors to question the rationality of executive compensation. In2009,the State Ministry of resources and social security department and other departments together issued a "salary limit order" to senior executives of enterprises under the central government, the order goes that the executive compensation should be coordinated with incentives and constraints, the growth of compensation should be coordinated with wage growth and other5principles. But many scholars questioned the effect of the limit on executives of central enterprises, they think that the limit can only temporarily alleviate the social questions caused by executive compensation, unreasonable phenomenon can not be solved radically. Especially when some enterprise losses, executives compensations have increased year by year.The unreasonable phenomenon of executive compensation is more obvious in China’s monopoly industries. the monopoly industry executive compensation is much higher than the executive compensation of non monopoly industry. Even in2008, part of monopoly state-owned enterprises’operating efficiency continued to decline, executives level is much greater than that of other enterprises in some serious loss of industries, such as aviation, electric power enterprise.For the public, what people concern more about is how the executive compensation is decided. Whether it is associated with the performance of the company and the responsibility they should bear. So, the salary limit is only a transitional measure to the reformation of salary system in state owned enterprises. From a long-term perspective, we should fully analysis and study factors that influence the enterprise executive compensation decisions, establish a scientific and rational decision of executive compensation mechanism, that is the key to the reform of enterprise salary system. This paper firstly reviews the related literature both domestic and abroad, and summarize the difference and connection between different research conclusions to further explore the causes of the difference. Based on the background that since2009the Ministry of Finance issued a limit on executive pay. The paper use the sample of listed corporation date in2012,and establish a regression model based on the effect of industry monopoly corporate governance and others on executive compensation. Make a multivariate linear regression using statistical software. The empirical results show that the measures of SASAC supervision towards executive compensation played a role,the central enterprises executive compensation was limited executive compensation is affected by the industry monopoly, company size, managerial ownership, the size of the board of directors,the company address. But the independent director for executive compensation did not play its due role, which is currently the executive compensation incentive system should be improved.Finally, according to the results of theoretical analysis and empirical research, we summarize the conclusion of this paper and put forward the corresponding suggestions to the incentive problems for executives at the present stage of our country.