An Empirical Analysis Of The Factors Affecting Executive Compensation Of Listed Companies In China's Central Enterprises

In recent years, with the disclosure of top manager compensation, compensation not only become the focus of media coverage and supervision, but also become a hot topic in academia. As the reform of state-owned enterprises in China came later, the compensation system is not perfect, which cause the phenomenon, widely exists in state-owned listing corporation, that executive pay dose not match corporate performance. Although, some salary limit orders has been promulgated in recent years, it is still remains to be further studied that whether these policies can really restrict high salaries and how to basically regulate state-owned executive pay. Based on this background, this paper focuses on the listed central companies. First, we defined some related concepts. Second, based on the principal-agent theory, incentive theory, corporate governance theory and human capital theory respectively, We analyze the contractual correlation of executive pay and company result, the senior executive incentive principle, the company's internal governance monitoring mechanism of the executives and senior managers of human capital value. Then, we proposed some hypothesis, all of which based on the company characteristics, corporate governance structure, executive on-the-job consumption, industry, area and time, etc. Finally, we selected the variables to establish an empirical model, using empirical models to verify the hypothesis.This article selects state a-share listed companies from 2005 to 2014 annual report data of which comes from the GTA database, RESSET database and annual reports of listed companies, as the research object. With spss19.0 software, we using stepwise regression analysis and multivariate linear regression analysis methods respectively inspect state executive compensation and corporate performance of listed companies, enterprise scale, Asset-liability ratio, corporate governance structure and executive on-the-job consumption, industry factors, the correlation of regional factor and time factor. Through stepwise regression analysis, we found that the degree of importance to sort these factors are:on-the-job consumption, asset-liability ratio, enterprise scale, ownership concentration and corporate performance and CEO duality. The order shows that using power rent-seeking on-the-job consumption become determinants of state executive pay. Independent directors proportion and scale of the board of directors did not enter the stepwise regression equation, indicating that the influence degree of the two variables on executive pay is too small, which shows the supervision and decision function of the board of directors does not really work out and independent directors lack independence and objectivity. Through multiple linear regression analysis, we found that State-owned enterprises operating performance?company size, the size of the board and on-the-job consumption level is proportional to executive pay, and the asset-liability ratio, whether the CEO duality, ownership concentration is inversely proportional to executive remuneration. The independent directors proportion and executive pay shows that independent directors in the state-owned enterprises in our country is not working, state need to intensify efforts to improve corporate governance. At the same time, we found time interval has a significant influence on executive pay. And executive pay is growing rapidly before 2009 while it growth slowly after 2009 which shows that salary limit order on executive compensation played a certain role in the control effect.At the end of the paper provides five-point Suggestions of the reform of state compensation:Improve the system of appointment and relieve central corporate executives "dual" identity; Remuneration linked to performance increase in long-term incentives; Improve the corporate governance structure, strengthen internal controls; On-job consumption disclosure of efforts to improve pay transparency;Adhere to the national implementation of the central corporate executives' salary limit order "policy.