Executive Pay System For State-owned Enterprises Study

Senior management personnel's' salary, which is necessary result of the enterprise internal contract replacing the market contract, is the outcome of modern enterprise system. It's the reward to the senior management personnel of enterprise, which contains labor force value, special contribution award and management risk value based on brain working. So senior management personnel's' salary can be divided into three parts:basic annual salary, performance salary and long-term incentive income. Rationality of salary structure is the important expression of rationality of executives' salary, while the rationality of executives' salary depends on the impartiality of salary system and contract. The core of executives'salary system is evaluation indexes and implements processes.This essay tries to build a series of fair, reasonable and feasible salary measurement system by analyzing natures of each composing part of senior management personnel's' salary. The measurement of basic salary can be further divided into performing social responsibility index, laborer reward growth index and appreciation of state-owned asset index; the measurement of performance yearly salary can be divided into management ability improvement index, produce technique innovation index and market product expansion index; the measurement of long-term incentive income can be divided into talent strategy index, finance strategy index and management strategy index. When executives change the term of office, we should choose managers according to the contents of bidding documents by Bid and Tendering Way with openness, equality and honesty. We should treat commitment made by candidates as criteria of assessment of the future senior management personnel's' salary. This will totally change present operation mode that most state-owned enterprises confirm yearly salary according to management condition at the end of the year or research stock inspiring method after their stocks go public. Besides, we should pay attention to problems like measurement information collection, judge of measurement staff and accounting of senior management personnel's' salary amount during the process of implementing measurement procedure.