Analysis On Stated-ownted Enterprise Managers' Compensation System

The seperation of the ownership and control right to the stated-owned enterprises,which makes the principal and agent relationship between the enterprises and their managers emerge out, is fastened by its reformation about the joint-stock system. The seperation means the separation of their owners and managers,so it is possible that there are different profits between them.The incomplete information and the uncertainty of the future make it difficult to accurately require the managers'action and the enterprises'outcome in the contract.So the managers'motivation and action are difficult to be restricted by the contract and the council of the state-owned assets.It is possible that the managers make actions to maximize his own profit during his managering,which leads to the principal and agent problem– decreasing the state-owned enterprises'profit.Compensations given to the managers are not only the embodiment of their management ability but also the symbol of their status,so their change could prompt the managers.They can be an approach to dissolving the problem.Because the managers'compensations are the important part in the compensation system,it is significant to research the system to perfect the managers'inspirit and restriction mechanism to improve the enterprises'profit and to promote the managers'development.I mainly research the perfect managers'compensation system to avoid the problem of the managers'moral hazard.To perfect it ,it is necessary not only to increase the managers'income but also to rationally collocate the different part of the compensation and provide them good environments.This paper includes the following:...