The Decision Mechanism Of Central Enterprises’ Executive Compensation In The View Of Modern Corporation Management

After the Third Plenary Session of the 18th CPC Central Committee, deepening reform for enterprises led by central enterprise will begin. Although the remuneration of senior executives has been demonstrated and reformed for many times, it is still a focus in the reform of enterprises. The remuneration of senior executives in the competitive central enterprises which share an important quotient in all central enterprises is the first to be affected. All this can illustrate that this field still needs more demonstration and analysis.Chapter one will pay more attention to Modern Company. From the emergence and features of modern companies and the general way for determining wage for senior executives in modern company, comparing with the way for determining wage in central enterprises, this chapter will indicate that the issue of the remuneration of senior executives in central enterprise is the control power of a company.Chapter two will start with setting up the control power of enterprises based on remuneration and combine the Decision on Major Issues Concerning Comprehensively Deepening Reforms of the Third Plenary Session of the 18th CPC Central Committee to apply agent cost theory to rationally and dialectally analyze the current lengthy agency problems existing in central enterprises. It will combine diversified ownership reform comprehensively promoted in the future after putting competitive central enterprises as priority pilots to feasibly explore the executive compensation decision, making executive compensation achieve regulation and incentive simultaneously.Chapter 3 will talk about how the competitive central enterprises optimize the remuneration reasonably on the background of limiting remuneration. In the near future, the remuneration in central enterprises can be limited. However, those competitive central enterprises, which are set up with modern company system and profit target, must make incentive mechanism to their senior executives. In order to retain excellent executives and professional manager, motive them to work hard in corporation, and get the best result for corporation, executives and the state, they can make mechanism which motives the central administrative cadres mainly by political incentive and professional managers by effective cash or stock rights, connecting with the different position of their senior executives.Chapter 4 mainly emphasizes that the explicitation and severization of regulatory rules is the requirement for the success of reform for the remuneration of senior executives in competitive central enterprises, even in corporation-owned by the state and establishing the system combined internal supervision and third-party supervision will improve the running of the capital owned by the state. That the senior executives perform the obligations of loyalty and diligence, and the corporation has strict information exposure system is the necessary guarantee for the former. It has been found that many laws and rules of China can help dissolve some problems, but the implementation of those laws and rules cannot be accurate, some even wrong. This chapter will offer some reasonable suggestions for making the scheme implemented successfully.