The Research On Salary Incentive Mechanism Of Listed Company Executives In China

Executive salary incentive problem stems from the ownership and management rights of modern enterprises separating from each other.There is information asymmetry and inconsistent objectives between the owners and the company executives, resulting in moral hazard and adverse selection problems. To solve these problems effectively, it must establish accord with our corporate executive compensation incentive mechanism to mobilize the enthusiasm of the executives, enabling executives to meet their own interests while maximising shareholder value and eventually achieve a win-win situation.In such circumstances, a research executive compensation is of great significance.This paper combines normative analysis and empirical analysis. Firstly, it reviews and analyzes domestic and foreign executive compensation. Then it carries on some theoretical analysis to the executive compensation from the following aspects:the principal-agent theory, human capital theory and management incentive theory, for the following empirical research and the study of mechanism design making a theoretical groundwork. Secondly, it is based on the annual salary data about listed companies executives for the year2008-2010, from the descriptive statistical analysis point of view, analyzing the present situation and problems of executive salary incentive. And it mainly does a comprehensive description of executives of the overall pay levels, the industry level, the regional level, managerial ownership and the unfairness. Through statistical analysis, the writer finds that the executives pay level of listed companies in China was yearly increasing trend, a large gap between different companies;Executive compensation has more obvious gap between the industry;Top executive compensation of listed company is also more obvious regional difference;Salary structure is not reasonable, and is lack of long-term incentive; The phenomenon of the unfair income distribution and the gap between the rich and the poor polarization exists between executives and workers. On the basis of selecting1285listed companies from2010as a sample, combining the analysis of the affectiing factors to executive compensation, the paper puts forward eight hypotheses.The variables include:the senior executive compensation, the company performance, the company scale, earnings per share, the proportion of managerial ownership, the proportion of state-owned shares, the stock concentration.Then it constructs linear multi-regression model, with correlation analysis and multiple regression analysis. By analysis, the writer finds that the level of executive pay has a significant direct proportion with company size, company performance, earnings per share; it has a negative relationship with the proportion of state-owned shares, the stock concentration, and whether to establish a Remuneration and Appraisal Committee, but not significantly; it is not a significant positive correlation with the proportion of managerial ownership; it is a significant weak negative correlation to adjunct two jobs. The empirical results show that company size, company performance and earnings per share have a greater impact on executive compensation, while the two jobs concurrently on executive compensation has a certain inhibition, the proportion of managerial ownership is generally low.On the basis of the above studies, it must design a science, long-term executive compensation incentives mechanism to solve the current situation and problems of listed companies executive pay. It mainly includes three aspects:(1) The principle of the listed company executive compensation incentive mechanism design. The principle of performance linked to compensation, Giving priority to efficiency with due consideration to fairness, The principle of the unity of responsibility and rights, The combination of short-term incentives and long-term incentive.(2) The structural design of executive compensation incentives of listed companies in China. This aspect mainly includes the annual salary system (Short-term incentive), equity Incentive (long-term incentive), special allowances and insurance benefits (complementary incentives).(3) Strengthening to create the external environment of the executives pay incentives of listed companies. To establish an effective internal restraint mechanism, Improving the information disclosure system and increasing the salary transparency, The establishment of a market-oriented employment mechanism for managers, Development and improvement of the capital market, And improving the construction of the relevant laws and regulations, Playing a social role of supervision by public opinion. Finally, some concluding remarks. Analysis of the limitations and prospects and improvements to be studied in depth content.