Research On The Executive Incentives Of State Owned Enterprises In China

Senior management as a business person, their management ability and work effort, for the quality of enterprise development plays a decisive role.Therefore, in the separation of ownership and control of modern enterprise system, how to effectively motivate managers to make the same interest between managers and owners, become the focus of attention.In recent years, with the deepening of SOE reform, how to effectively incentive executives, to improve business performance, market competitiveness, and enhance the vitality of enterprise development is the key entry point for SOE reform.Executives incentive problem will become important and difficult stage of the state-owned enterprise reform, which determine a reasonable salary incentives is important to establish an effective incentive mechanism of senior executives being.Since China began to implement state-owned enterprise reform, the state-owned enterprise senior executives incentive system, in particular the remuneration carried out a series of incentives to explore and improve.In recent years, the reform of state-owned executive pay system to achieve some positive results, but there is also not reasonable salary structure, salary supervision mechanism is not perfect and other issues.In recent years, the reform of state-owned executive pay system to achieve some positive results, but there is also not reasonable salary structure, salary supervision mechanism is not perfect and other issues.On the one hand, state-owned enterprises executive pay has been high, not only affects the vital interests of the owners, but also widened the gap between senior executives pay and ordinary employees, causing public discontent and questioning; on the other hand, changes in executive compensation changes are not consistent with the results of the phenomenon is more serious, this change is not conducive to the future development of state-owned enterprises.From the current problems, the established state executive pay system, there are still a lot of room for improvement unreasonable. Therefore, how to build an effective state executive compensation incentives, what factors affect the executive compensation incentive system, now become an urgent problem.In fact, how to build an effective state executive compensation incentive system has attracted the attention of authorities. Since 2004, the SASAC has issued a series of regulations on state-owned executive pay system, and continue to state executive compensation system to adjust and reform.However, the effect on the current salary incentive point of view, not satisfactory. In fact, there are many reasons behind this, and not just the incentive system itself.SOE reform in the absence of the owner of state-owned enterprises led to an "internal control" and state-owned enterprises facing the market environment does not improve incentives and other issues will cause failures. In this context, the pay of state executive incentive, not blindly learn from the successful experience of Western countries, the blind pursuit of the state executive pay levels in line with the level of foreign markets.The Chinese state-owned enterprises should be the actual situation, combined with China’s state-owned enterprises in which the internal governance structure and external market environment, to establish a targeted incentive pay system.So, for the state executive, we should choose what kind of salary incentives and incentive intensity, incentive both to play its role, but also to ensure the reasonableness of it? From the state-owned enterprise in which the external market environment and the current internal governance mechanism two angles, analyze the state-owned enterprise senior executives incentive problems for the selection of senior executives reasonable incentives put forward policy recommendations.This paper is divided into seven parts, the first part of the introduction, he describes the historical background and significance of thesis writing. The second part is the literature review and theoretical explanations, through the study of domestic and international situation and the basic theory of Carding and summarized, to study later chapters of state executive incentive compensation to pave the way. The third part is an introduction to the main manifestations of state-owned enterprises pay incentive system and its excitation intensity. The fourth part is the impact of market forces, state-owned enterprises incentives of its senior executives. By analyzing the impact of market forces in its performance of state-owned enterprises, efforts to come to affect business performance and management level less relevant conclusions, as well as its product market and manager market incentives. The fifth part is the internal governance mechanism for state-owned enterprises an overview of the problems and the implementation of the consequences of the strong incentives were analyzed under internal control. The sixth part of the incentive stock options in the form of the applicability of state-owned enterprises were analyzed. Finally, the conclusion is this strong incentives stock options do not apply to our state-owned enterprises currently recommended annual salary system of weak incentives.Through the analysis of the existing problems and the reasons of the current stage of the executive incentive system of state-owned enterprises in China.This paper proposes policy recommendations for;China’s state-owned enterprises executive pay incentive system. This not only has important theoretical significance, but also for promoting SOE reform process has a crucial practical value. On the one hand, rich in human resources management theory, personnel management economics, labor economics and Incentive compensation incentives related aspects of theory. On the other hand, for the executive incentive mechanism of state-owned enterprises of our country, has a certain reference.