Shareholder Say On Executive Pay

There are multiple types of agency relationships within a corporation, the most acute and sophisticated of which is shareholder-manager one. It is of immense significance whether or not executive compensation positively relates to company performance regarding value escalation of company and capitalization return. Ever since the nightmare in 2008, people outraged over executives fat paycheck, particularly in view of those from financial sector. While the free-market valve stops working on regulating egregious executive pay, lessons taken from abroad warn us to meddle in by using administrative power. This Article starts with general introduction and interpretation of western countries’strategy on establishing reasonable executive compensation. Furthermore, Articlepersists in putting together Chinese current scenario and foreign countries’experiences for the purpose of boring a "good law" for Chinese rule makers.In Introduction, it demonstrates the big-picture executive compensation problem in China as well as this Article’s distinguished composition to brief and analyze three American judicial decisions.Chapter One describes the latest SOP regulations in UK and US. Section One focuses on Britain legislative progress towards binding SOP nowadays. Section Two narrates the legislative fruits and practice norm in US. Section Three, as said, engages in three case studies. Chapter two includes the dual-track economy system, grey income and internal compensation gap in light of misshapen executive pay situation in China.In Chapter Three, the author employs abundant empirical analysis to identify Chinese internal problematic diseases, including board oversight, incentive approach, compensation committee and its advisors, independent directors and shareholding structure. Chapter Four is mainly designed for ways to upgrade present executive compensation literature, such as substantial independent compensation committee, stringent tax, complete disclosure, clawback, advisory SOP path and judicial review.