The Study On Executive Compensation Disclosure System Of Listed Firms In China

Senior management is generally a team of individuals at the highest level of organizational management who have the day-to-day responsibilities of managing a company or corporation, they hold significant intelligence conferred onto them with and by authority of the board of directors and/or the shareholders, mainly includes general manager, assistant manager, financial manager, the secretary to board etc. One basic feature of modern corporate system is the separation of ownership and management, control of the company transfers from owner to manager. The higher position of executives, the higher salary gets paid. In recent years, wide concern of the circle has been aroused for sky high executive compensation. Faultiness of structure of enterprise administration in Chinese listed firms, unreasonable executive compensation system and lack of transparency on information disclosure, all caused various self-interest behaviors of senior executives.The2008financial crisis arise from the United States spread rapidly around the world. These landmark episodes have drawn attention to the high levels of executive compensation. Unreasonable executive compensation system is one culprit of this global financial crisis. Lack of transparency on information disclosure is one of the reasons that cause the unreasonable compensation system.Market economy in china arose late. Compare with developed countries, china has many imperfections on disclosure of executive compensation. This article examines regulation and disclosure of executive compensation of China and other developed countries in every aspect, to show the shortage of China by comparison. Offer proposal on optimizing disclosure rules by learning from oversea countries’ successful experience.This article consists of five sections. Section one introduces the definition of executive compensation system and current pay practices of china’s listed firms. Identity the problem of executive compensation system of china’s listed firms and analysis the reasons accordingly. Section two, author uses concepts of market failure and agency by mandate to analysis the meaning of disclosure of executive compensation. Section three, Analysis of the necessity of the executive compensation disclosure system function to reflect the disclosure system.Section four, Analysis of the remuneration disclosure regime some foreign countries and regions. Section five, according to current situation and problem of executive compensation disclosure system of china’s listed firms, author comes up with some ideas of improving the disclosure system. This article analyzes facts; discover, analysis and solve problem from the viewpoint of law, economics and management etc.