State-owned Monopoly Enterprise Executive Compensation Research: Based On Corporate Governance

Since the reform and opening-up，China has undergone tremendous changes.People’s income and living standards have been greatly improved because ofsustained and rapid economic development. However，with the rapid growth of thenational economy，the income distribution gap between different social groups is toolarge，which arouse widespread concern in society. The most prominent part of theissue is the discontent and doubtful thoughts caused by the salary income ofstate-owned monopoly executives. State-owned monopoly belongs to people and thehigh profits generated by them deserve a fair and reasonable allocation, that is，peopleacross the country can share the high profits made by monopolies all together. Buthow can we distribute the state-owned monopoly profits in a reasonable way？Theimperative is to establish an effective state-owned monopoly profit distribution plan.At present，the faulty corporate governance of state-owned monopolies becomes amajor obstacle in the way to establish state-owned monopoly profit distribution plan.It’s mainly because the state-owned enterprises only establish the structure of a basicform in accordance with the relevant provisions of the Company Act.Although thecompanies have the framework of corporate governance such as general meeting ofstockholders and board of supervisors,this structure is just superficial and it can’t playa substantive role. The general meeting of stockholders is often controlled by largestockholder and there are lots of limitations for board of supervisors to superviseeconomic benefits, both of which lead to the failure of actual supervision of thebehaviors of the board of directors and senior executives. In the board of directors,senior managers in the enterprise are key members of the board of directors. Thesenior managers themselves, rather than all the owners, make decisions about theirpayment. Unsound corporate governance structure has seriously hindered equitabledistribution of state-owned monopoly profits. State-owned monopolies shouldregulate the state-owned monopoly system and improve corporate governancestructure as soon as possible, that is, not only bring economic interests for the wholecountry but also make all of us share the high profits to achieve the goal of equitableincome distribution. On the base of corporate governance, this paper describes the current situation ofthe executive compensation in state-owned monopoly. Analyzing about the existingproblems in corporate governance of state-owned monopoly, this paper shows thereason why sky-high payment exists in monopoly. Finally，corporate governancestructure improved, executive pay will be improved and social justice will beachieved.