The Research On Drivers Of Chinese State-owned Business Executives Pay And Their Economic Effects

Since the first public of the individual executive pay has come, reports andsupervision of news media made the compensation issue become the focus ofcommunity’s attention. Because of the short developing time of China’s listedcorporation, and the imperfection of the development of the corporate governancesystem in our country’s listed corporation, there widely exists a phenomenon thatexecutive compensation and corporate performance don’t match each other. AlthoughChina has introduced many new policies in the system, but the state-ownedenterprises executive compensation system is still not mature. For all sorts ofExecutive compensation chaos, in theory, scholars in our country at present have noconsistent interpretation. So, in our country, at present, drivers of listed companiesexecutive compensation and their impacts on the future corporate performance shouldbe researched more.This paper adopts the method of combining theoretical analysis and empiricalanalysis. In theory, first of all, we analyze the two drivers of listed companiesexecutive compensation from the incentive theory and executive control theory；secondly, we analysis the system background of our country state-owned enterprisefinally, we make this paper’s assumptions.Empirical results show that, first of all, executive control power of state-ownedenterprises will affect the executive compensation significantly, but the executiveperformance does not affect the executive compensation significantly. This shows thatin our country at present stage, the state-owned holding company executives havegreat power, and use their power to affect their compensation contracts. Secondly, theenterprise future performance will increase with executive compensation driven bythe executive control. This does not accord with the theoretical analysis and the assumptions of this article, so this part does not validate the hypothesis from thispaper, salary may be a kind of compensation and incentive of rent-seeking power, andmay have its positive side about the future of the enterprise performance.The innovation point of this article is that, Chinese researches on executivecompensation mainly centralized at two aspects: corporate performance and executivecontrol power, however, in this paper, the performance of enterprise is separated as:performance of executive contribution and the performance of natural resourcesproperty contribution. Finally study on how the performance of executive contributiondrives the executives pay, and it will contributes to the research on drivers of Chinesestate-owned business executives pay in the future.