D&O Insurance,Manager Power And Executive Compensation

Executive pay has been a controversial topic,especially since the 2008 financial crisis,Wall Street executives frequently on financial institutions to obtain millions of dollars in annual salary,and high pay and company performance is out of line leads to executive compensation,onto the cusp of public opinion points;And also in our country,"astronomical salaries" and "zero pay" the coexistence of chaos,has also been widely criticized by the public.As the backbone of the enterprise managers,has been playing an irreplaceable role in the daily course of business venture.So,how to effectively guide the managers to actively perform their duties,executive compensation contract system for effective management and oversight of corporate governance practitioners most prominent issue,but also theorists Explore Hot and focus.As a third force directors liability insurance executives fortune in Europe and other mature capital market,its incentive effect on the company as well as external oversight managers favored in Western countries,but in China it has snubbed.Thus,although the directors liability insurance executives corporate governance theory in Western countries has gradually improved,but is still in the economic transition of China's capital market is equally applicable whether we still worth further study and discussion.This paper reviews the literature review and theoretical study puts forward in China deepening reform and opening process,since the lower internal corporate governance and external oversight defect system is not perfect situation,Chinese executives of listed companies to use its power to influence remuneration contract development,in order to gain a more lucrative salary levels and excess returns.Meanwhile,the executive director liability insurance companies have begun to attract the attention of practitioners and theorists in recent years,its corporate governance effects can be applied on the issue of executive pay,in order to alleviate agency conflicts worth further study.Therefore,based on the basic status of China's capital market,China's listed companies to explore the impact on executive pay levels of power management,and further introduction of executive directors liability insurance,inspection and regulation of its power management and executive compensation It has important theoretical and practical significance.Firstly,in 2009--2013 China's A-share listed companies in the initial sample,by collecting and collating executive directors liability insurance,power management and executive compensation-related data.In this paper,the relationship between the actual salary level salary exception management and executive powers between the executive and explore research,the study found:there was a significant positive correlation between the power and the executive management and executive pay levels actually pay anomalies that the greater the power management,executives from the companies to obtain higher pay levels,and the use of excess power to seek the more pay for the rich.Secondly,the introduction of executive directors liability insurance as an adjustment variable,tested by empirical analysis of the effect of shaping the executive liability insurance for directors and management of the power relationship between executive compensation and the following conclusions:purchase liability insurance executives directors,creates moral hazard problem management,its escape liability offered refuge,intensified its abuse of power for personal gain behavior.Finally,based on the conclusions from the actual situation in China,it discusses the Listed Companies in China executive compensation contract specific strategies and recommendations effectiveness.