The Research On Executive Compensation Incentive Of Listed Companies In Monopoly Industries

In recent years, the salaries of high executives in most monopoly industries and enterprises are far too high. Considering citizens and scholars’opinions, the Ministry of Finance has also introduced a salary limit order. Both the rationality and legality of high executives’ remunerations are questioned, but there are still many senior officials of monopoly industries complaining about lacking of pay incentives, asking for an international paying standard. With the development of market economy and the gradual disclosure of executive compensation data, the incentive of senior managers in monopoly industries is an increasingly subject to get concerned. How to establish an incentive system to suit the needs for senior managers in the monopoly industry, so that these corporations and companies can stabilize their senior management personnel, has become one of the most important concerns of listed companies.The article is divided into five parts. First of all, this thesis reviewed the relationship between the remunerations of senior managers in listed domestic companies and foreign corporations and their performances; Secondly, the theory of incentive paying system was discussed, once again we review the current situation of incentive systems for senior executives of listed companies in monopoly industries, calculated basis and the strength of selection based on the analysis; Then, strictly defined in the study sample, we began an empirical study on the relationship among the incentive system for senior managers, the companies’ performance and other relative influencing factors. Combined with theoretical analysis and empirical research findings, this thesis tried to offer some relative and constructive suggestions to help building an appropriate incentive system; Finally, the conclusions of this study and the value of application were proposed, and also we pointed out the limitations of this study and the future research directions in this field.The innovations of this study are the following two points:First:In the previous study, the strength of incentive pay options was only focus on the efficiency issue to study problems, like lack of incentives, moderate incentives and excessive incentives. Due to the consideration of fairness, this thesis creatively designed the strength of incentive system for senior managers in monopoly industries from both the efficiency and fairness point of view. Second:As to the policy recommendations, because of the virtue of the resources scarcity, monopoly industries are capable of obtaining excessive profits, causing the company a premium, this part of the premium has nothing to do with the individual efforts of executives. Therefore, this part of premium has to be stripped when we launch the incentive system for senior managers in the monopoly industry in order to demonstrate their true performances.