Legal Regulation Of Chinese Company’s Executive Compensation System

Financial sector has always been one of the most dynamic part of the social sectors. As a modern economy the most important economy in the form of the company’s governance model, operating conditions are more and more concerned. In recent years, especially after the financial crisis in 2008,Financial institutions represented executives overpaid executives phenomenon has aroused strong dissatisfaction of society. In the past, executive compensation is one of the means to reduce agency costs the company, but as companies’ systems and management practices developed, the interests between the company and executive were divided, executive compensation become the core of corporate governance. When executive compensation handled properly at the right time, the development of the company will be restricted. Although the executive pay problem is particularly prominent in developed countries, our company is also facing a growing number of such issues, we need to take immediate measures to regulate executive pay. Company’s executive compensation governance is a complex issue, the previous studies has focused on the economy, This article will shift the perspective of research to the legal aspects.This article has five parts:The first part is the preface. This section describes the writing background articles and the meaning of company executive compensation issues legal regulation.The second part of the article is an overview of the basic theory. First, from the basic concept of this chapter defines the concept of the modern corporate system and remuneration of senior executives. Then analyzes the theoretical basis of the company’s executive compensation system, represent the views are: principal-agent theory, human capital theory, most contract theory.The third chapter is the analysis of the remuneration of company executives, There are two major researches contains laws regulating the status of research and pay systems company executives.The fourth chapter is on the outside the company’s executive compensation introduce legal regulation. Select the United States, Germany, and Japan as representative of countries.The fifth chapter make suggestions to improve the Legal Regulation of the chinese company executive compensation:Reform salary decision-making mechanism; Improvement of the company’s executive compensation disclosure regime; Strengthening the judicial review; Improve the relevant tax law system.