An Empirical Research On Pay Incentive Mechanisms Of Top Managements In Private Listed Companies Of China

In the modern enterprise system, corporate ownership and management rights separated from each other. Due to problem of different goal, interest conflict and information imbalance between operator and owner, also under the circumstances of insufficient supervision of the owner, how to stimulate operators has become a very important issue. Executives or top management staff, play a role of agent in the enterprise, their business decisions have a direct impact on corporate benefit and future development. At present, the stimulation of top management has become a hot topic of contemporary economics, top management stimulation of listed companies also become the basic issues for operation efficiency in the corporate.Private Listed Company, listing in Shanghai and Shenzhen stock transactions largest shareholder of the private sector, the controlling shareholder is a natural person or natural person from the control of private enterprises. Compared to state-owned listed companies, private listed company has a better well-defined property rights system, which determines the private shareholders of listed companies have the enthusiasm to find a suitable senior management and come up with a effective incentive mechanisms to promote the senior team to play to the greatest strength.Pay incentive is one of the most important ways to stimulate executives in a modern enterprise. Then, what kind of incentive pays is more effective to companies'executives? What is the relationship between executives'annual salary and company's performance? What is the impact on company's performance because of the executives'salary gap in the company? How does the shareholder conditions and share-stimulation can affect the company performance? As samples of China's private listed companies which were listed in Shanghai and Shenzhen stock before the end of 2007, this article will analyze above problems and give the conclusion, also will give some suggestion for reasonable executives stimulation mechanism.The innovational points for this article are following:1. A sample selection of innovation. In the past, the empirical research for the domestic executives'pay incentive mechanisms is basically all the listed companies or state-owned listed companies as an example. There is few to research private listed company, but the private economy plays a very important role in the modern economy, so it is a top priority to settle out the issue of executive incentives and strength the private economy.2. Variable selection of innovation. In the analysis of executives'pay and the performance of listed companies, which to use the pay of the CEO or Chairman of the board and the top three executives'pay as the pay indicator, but the writer thinks that executives should be a team, who working together to influence the performance of listed companies, so to use the per capita annual pay (AP) of executive as a annual incentive indictor of listed company, which is calculated by the total amount of executive annual salary released in 2007 annual report divide the total number of executives.3. The research results of innovation. There is drawn out the different studies resulting in the article because of the times advancement and particularity of private listed, such as the executives ownership and the performance of listed companies.