The Research On Legal Regulation Of Senior Executives’ Compensation Of Listed Company

Separation of ownership and management is a typical characteristic of the modernenterprise, the company owners and managers form the principal-agent relationship. Interestdemands principal and agent are not entirely consistent, resulting in principal-agent problem,agency costs attendant. Executive pay constraints on executive behavior and role ofmotivation to play, is one of the effective ways to solve the agency costs. But now worldwide,executive pay have both been extremely high phenomenon is the most important astronomicalsalaries, but not so much with the performance of the company, this phenomenon has arousedstrong dissatisfaction of public and shareholders.This article is divided into four parts, the first part mainly on the "executive","compensation" two basic concepts defined, simply introduces the entrust-agent theory, andpoints out the problem of executive compensation in our country. The author thinks thatexecutives should break through the limits of "company law" regulation, the specificmanagement as per capita executive; Compensation shall be interpreted as executives for jobreasons all monetary or non-monetary benefits. Problem of executive compensation in ourcountry is mainly manifested in four aspects: the unreasonable salary structure, inadequatedisclosure of compensation information, executive compensation has nothing to do with theperformance of listed companies, the compensation committee of independent directors is notindependent.The second part shows the foreign advanced experience. This part according to theexperience of developed countries, the paper summarizes executive compensation issues,mainly from the executive compensation decisions configuration, executive compensationdisclosure system, the tax law and accounting regulation, judicial intervention, etc.The third part of our country the legal regulating of the specific measures, summarizesthe problem of the following four aspects:1. The executive compensation decisions do notconform to the practical needs. Compensation committee members not only have theindependent director, executive director and at the same time, their independence compromised.2. Compensation disclosure system is not perfect. Our country law preliminaryestablished the information disclosure system, but the concrete form and content of thecompensation disclosure is obvious defects.3. The system of judicial review of executive payhas not been established, a judicial review has not really involved in executive pay.The fourth part in view of the problem of executive compensation in our country, anddraw lessons from foreign advanced experience, put forward the countermeasures.1. Perfectthe compensation decision mechanism, including perfecting the system of the compensationcommittee and two aspects of strengthening the executive compensation and corporateperformance correlation;2. Improve the system of executive compensation disclosure. Mainlyfrom the increase salary disclosure project, to disclose the compensation committee reportinterpretation and perfect the compensation form three aspects;3. The moderate judicialintervention. Mainly discussed in this part to the principle of judicial intervention of executivepay, believe that justice can intervene in executive pay, but should follow certain principle, injudicial review should be the standard, the incentive structure and incentive level three aspectsto review, at the same time should also increase shareholder lawsuit’s enthusiasm, maintainingcompany interests.