Reflection And Reconstruction Of Legal System On Executive Compensation In China Finance Under Subprime Mortgage Crisis

The outbreak of the subprime mortgage crisis in 2007 triggered a number of researches in the direction of financial law, the executive compensation in financial industry is one of them. Subprime mortgage crisis has given us a opportunity to re-look at the financial executive compensation .The reason why the executive compensation in financial industry brought so much controversy is that there is high risk because of their particularity nature of the industry. Executives'unreasonable compensation will result in the blind pursuit of short-term effectiveness, and even fraud. As a public interest entity, there are a number of stakeholders in the financial industry, such actions would seriously damage the real economy, and even result in systemic risk. Secondly, contrary to the principle of fairness advocated by the socialist system, there exists a widespread phenomenon that the executives in China's financial industry enjoy huge salaries, which lack of rationality. So"limited compensation"of executives become the subject in financial industry. Through the study of auditing, financial management, human resources management, finance and law multidisciplinary we found that"limited compensation"is just temporary solution, and there are also disadvantages that it may hinder the development of financial industry for"limited compensation"itself.In the U.S. financial sector analysis and comparison of executive compensation, the defects of corporate governance is the key reason why financial industry executive compensation is unreasonable.Only the establishment of unified, coordinated system of the executives'compensation in financial industry based on the good governance of company can we eradicate the malpractice and promote our financial services industry to occupy advantageous position in the financial globalization through the salary system.