Research Of Executive Compensation Institutional Design In Listed Company

As the main body of market competition, the success of enterprises depends largelyon the executive decision-making and management. Executive compensation is a keylink to affect executive behavior. In China, executive compensation has always been aproblem of concern since the financial crisis in2008. The scandal of huge executive payin the United States, the explosive growth of executive pay in China, and the following“"executive pay limit”, fully illustrates the fact that there is something wrong with theexecutive pay. Considering the importance of executive compensation, this thesis aimsto analyze the research of the previous scholars, put forward the influential factorhypothesis of executive compensation, make empirical analysis, and extract the maininfluential factors. On this basis, the executive compensation plan is designed and thecorresponding supervisory system is made. The institutional design of the thesis ishoped to make a contribution to the scientific and rational development of executive payin our country.This article summarizes the previous research results about executive pay andconstructs the influential models of the executive compensation by the empiricalmethod, from three angles of the enterprise internal and external influential factors inaddition to the executive individual factors, taking the earning rate the net assets andearnings per share as the performance indicators of enterprises. By using the1081samples of A-share listed companies in Shanghai and Shenzhen during2012and2013,the paper carries on the empirical research of the model. Results show that the executivecompensation has negative correlation with the executive ownership, the equityconcentration, and the setup of the compensation committee, while it has negativecorrelation with the age, tenure and education level of executives, in addition to the area,size and performance of enterprises. On the basis of the empirical research, theinfluential factors can be sub-classified into short-term invariable factors and short-termvariable factors. With the reference of the USA and Japan compensation models, thepaper comes up with the principles of China compensation structure and thecharacteristics of the executive scientific performance appraisal system. The constraintmechanism system is also designed from the two aspects of information disclosuresystem and the introduction of legal intervention. The innovation of the thesis is the empirical research on the influential factors ofexecutive compensation, which have been divided into the short-term invariable factorsand short-term variable factors; in addition, the design principles of China executivecompensation structure has been put forward with reference with the USA and Japancompensation models, and compensation is divided into the invariable and variableparts. On this basis, the paper advances the executive performance appraisal, points outthe common problem of the executive performance evaluation method and comes upwith the solution. In the end, it puts forward the path of media management and recallrules of legal intervention as the two constraint mechanisms to protect the enforcementof executive compensation system.