Research On The Impact Of Risk-taking Level Of Securities Companies On Executive Compensation In China

After the reform and opening-up,China’s economy continues to flourish and develop,and the socialist market economy with Chinese characteristics moves forward smoothly.Among them,the financial market is making great progress.In the past 30 years,its functional structure has been constantly improved,showing a thriving prosperity.The financial market has also produced many problems in the process of flourishing.The global financial crisis in 2008 has aroused people’s concern about the salary design and incentive mechanism of senior managers in the securities industry.The top managers of major financial institutions have pursued their own maximization of earnings while neglecting financial risks.Once financial risks erupt,they will trigger the global economic crisis.Governments have begun to think about how to reform the financial system to better govern securities companies,how to design more reasonable incentive mechanism for senior managers,so that securities companies can pursue high returns while taking into account the control of risks,which is the core issue to be solved in the long-term stable development of the financial system.Taking listed securities companies as an example,this paper intends to support the view of this paper through empirical research on executive compensation risk incentives,comprehensive use of panel regression measurement and statistics method,through specific data and conclusions.This paper can be divided into the following parts.Firstly,in the part of literature review,this paper reviews the relevant theories about executive compensation incentive and risk-taking level of securities firms,demonstrates the necessity of executive compensation incentive,and also raises the problem of excessive risk-taking that may be caused by executive compensation incentive under the existing salary system;secondly,the risk-taking level of securities firms for senior managers’decision-making and management enterprises in securities firms.It plays a special role,mainly because the securities industry is different from other enterprises in business model and industrial form,and its importance in the national economy is also different.It is particularly important for securities firms to pay attention to risk level management in practical work.Then,this paper compares the risk indicators of securities firms,and fully considers the data.On the basis of availability,risk coverage and net capital liabilities are selected as indicators to measure the risk-taking level of securities firms.Finally,the historical data of 22 securities firms listed on A-share market are selected as sample data,and the impact of risk-taking level of securities firms on executive compensation is empirically analyzed.The conclusion shows that Chinese securities firms use liquidity wind to determine executive compensation.Risk factors are included in the salary assessment system,but the overall risk coverage is not considered.Finally,the paper puts forward policy recommendations for securities firms and government regulatory authorities respectively.This paper studies the impact of risk-taking on executive compensation.In theory,it increases the dimension of determinants of executive compensation in securities companies,and takes risk factors as important indicators instead of performance indicators and market indicators.It is of great significance for the innovation of traditional salary determination indicators.It promotes the trend of securities firms to go further,pay attention to risk control and improve the efficiency of capital use.In practice,this paper shows the correlation between executive compensation and risk-taking level of securities companies in China.If the level of risk-taking is paid more attention by regulators,risk management consciousness will be raised in company management,and risk factors will be included in executive compensation design.Only by this mechanism can the level of governance of securities companies be improved and the style of securities companies in China be improved.The level of insurance management,so that management really shoulder the responsibility of risk management.