Salary Restriction Order,executive Compensation And Operating Performance

In recent years,with the rapid development of society,the number of executives' salaries has increased,which has become the center of public opinion in public media and society.at the same time,the rationality of executives' sky-high salary has been questioned.In 2009,the government issued a " salary restriction order" for the head of central enterprises,stipulating that the annual salary of the head of state-owned enterprises should not exceed 30 times of the average salary of ordinary employees.some scholars questioned this,and thought that it could only temporarily relieve the public opinion caused by the high-priced salary of senior executives,but it could not solve this unreasonable phenomenon.especially when the salary restriction policy was promoted,the phenomenon of " salary performance upside down" and "poor temple rich monk" still appeared.Therefore,can successive government policies play the expected role?Based on this,this paper takes state-owned holding companies as samples,and under the background of government compensation control,uses empirical research methods to explore the effectiveness of government compensation control policies.After tracing back the history of salary system of state-owned enterprises,studying and analyzing the causes and economic consequences of domestic and foreign government salary control,this paper takes the scheme of salary system reform of the head of central management enterprise(hereinafter referred to as " salary restriction order 2015")which was comprehensively implemented in 2015 as the research object,takes 436 state-owned enterprises data in China as the research sample,and uses double difference model to investigate the influence of salary restriction policy of state-owned enterprises on executive salary and corporate performance respectively,and at the same time studies the influence of salary restriction order on executive salary performance sensitivity before and after its implementation.The empirical results show that:(1)the " salary restriction order 2015"policy effectively inhibits the growth of executive compensation in state-owned enterprises.In the face of the increasingly strict salary restrictions of the government,while paying attention to maximizing their own interests,state-owned enterprise executives should not only consider observing the salary control system,but also minimize the impact on their own economic interests,and executives can cooperate with the implementation of policies by reducing the growth rate of salary.(2)the sensitivity of executive compensation performance after the promulgation of" salary restriction order 2015" is significantly higher than that before the promulgation of " salary restriction order 2015".As a transitional policy in the salary system reform of state-owned enterprises,the implementation of the salary restriction order has achieved the expected results.the correlation between executive compensation and performance is more significant than before the promulgation of the policy,which proves that the performance-based executive compensation contract system in China has achieved initial results.(3)the introduction of " salary restriction order 2015" reduced the incentive for senior managers of state-owned enterprises,resulting in the decline of company performance.Improper salary control will weaken the executive compensation incentive system,and on-the-job consumption or corruption will occur.Of course,the government has directly limited the salary of senior managers,which leads to the reduction of the space for senior managers of state-owned enterprises to use their own rights to set their own salary,and the incentive effect of the senior management salary system of state-owned enterprises has declined.This article is based on the special institutional background of the state-owned holding boss company.from two angles of the external government system and the internal management right of the state-owned enterprises,this article analyzes the influence of the government compensation control policy on the executive compensation and enterprise performance of the state-owned enterprises through theoretical and empirical analysis.Enriching the economic consequences of government regulation and providing clues for the dynamic adjustment of policies.At the same time of accelerating the marketization reform of executive compensation in state-owned enterprises,it is an urgent problem for us to play the role of transitional measures such as salary restriction and construct a reasonable,scientific and effective decision mechanism of executive compensation.