Executive Compensation, Managerial Power And Unfairness Of Executive Compensation:Analysis On Listed Companies Of Chinese Monopoly Industries

The unfairness of executive compensation is an important factor that affects the management behavior of company managers. Based on the executive compensation, revealed compulsorily, of managers of China’s listed companies, and on the nature of the stock right of the company in monopoly industries, we have studied the effect of the fairness of executive compensation on company’s performance. The results of our study demonstrate that there exists an obvious direct correlation between the positive extra executive compensation and the performance of non-state-owned enterprises, and we have not found that there exists a direct correlation between the positive extra executive compensation and the performance of state-owned enterprises, nor have we found that there is a relationship between the negative extra executive compensation and the performance of non-state-owned enterprises as well as that of state-owned enterprises in monopoly industries, and other industries.On the basis of managerial entrenchment, this paper makes an empirical study on the relation between managerial entrenchment and equity of managers compensation by employing the panel data of Chinese listed firms from2002to2010There exists the positive relation between the powers of top managers and inequity of top managers compensation; the ownership of managers is positively correlated with executive compensation inequity of managers compensation; managers compensation of the state-owned listed company is more equity.This paper has furthered the study on stimulating company managers with executive compensation and offered an import foundation for the unfairness of the executive compensation system for China’s enterprises. Therefore, when it’s time to modify governance and improve compensation, the managerial power should be concerned. Moreover, it is necessary to perfect the mechanisms of supervision and enhance the transparency of disclosing information to the executive compensation.