Research On The Compensation System Reform Of The Financial Executive Of Major Economies In China After The Crisis

Perfect financial executive compensation system, establish and improve the financial executive compensation incentive system, avoid the short-term behavior of excessive risk-taking, eliminate the influence of financial crisis on economic development has been the important subject confronting countries around the world. After the outbreak of the financial crisis in 2008, unreasonable financial executives payment is considered as one of the engines stimulate crisis. In such a salary incentive system, financial executive salary structure and incentive mechanism is separate from enterprise risk management and long-term performance indicators, then lead to high "moral hazard". The financial executives in order to obtain high short-term returns, take aggressive marketing strategy, high-risk investment behavior. The excessive innovation of financial instruments, financial services and financing technology lead to the increase of the complexity of the financial system. The information asymmetry problem is increasingly serious. On the basis of the principal-agent relationship, specialized service become the main working of financial market. In such a background, unreasonable salary incentive system lead to worsening principal-agent problems, continuously enlarge financial risk. At the same time, because of the deficiency of regulation, regulators ignore the interest of the investors, employees, even the whole society. So it’s necessary to reform the salary system of financial executives.To prevent the impact of financial crisis continue to spread, governments of many countries have issued rescue plan, invested a lot of financial capital, to maintain the stability of financial markets, at the same time, the financial executives whose companies accept the government bailout are still enjoy the high compensation which inconsistent with corporate performance. It’s inevitably become the focus of social attention. In response, the governments of many countries release all kinds of solutions, aiming at limit financial executive pay to stabilize the financial market order. This article is start from the relationship between the financial executive compensation and the financial crisis, draw lessons from the financial regulatory reform scheme of executive compensation system of the major economies, combine with China’s financial institutions, put forward legal suggestions to perfect the finance executive payments system of our country.Through the comparative analysis, integrating theory with practice, this paper argues that the financial institution compensation reform shall specify the following principles:First, the financial executive compensation system should be coordinated with the long-term value of shareholders and the financial institutions, consistent with prudent risk management. Second, the financial executive compensation system should be included in the financial regulation, improve the transparency of the compensation. On this basis, this article put forward some legal suggestions from many facts to improve the system of financial executive pay:corporate governance mechanism, financial executive compensation structure, the financial supervision and information disclosure, executive remuneration derived litigation and judicial review.