Study On Marketalization,Compensation Control Of State-owned Enterprises And The Sensitivity Of Executive Compensation

As an important mechanism of corporate Governance, executive compensation has always been attracting extensive attention from the academia and Government departments. For a long time, various post-related consumption, which like black holes attached at the executives position above administrative Levels in some state-owned enterprise, are even a tender string that stirs straightly at the pain points and sensitive nerve of the public. In face of the pressure of public opinion and social public voice,Governments on behalf of different countries have introduced various versions of“salary limit”. However, if the intervention behavior of Governments really improves the executive compensation's sensitivity to performance, or make the executive compensation incentive more effective? Should enterprise executive compensation be decided by the Government or by the market to achieve optimal allocation of resources?In China, state-owned enterprises generally strongly intervened by Government, the Government holds the most part of the social resources. As a proprietor representative of state-owned enterprises and to achieve various social goals, the Government uses their resources and power to intervene the business operating and decision-making activities of the enterprises. So in our country, state-owned enterprise executive compensation in different degrees has been intervened by Government in fact. Based on the Chinese unique institutional background and view from the perspective of the Marketalization, this paper will study the influence and effect that compensation control of the Government have on the executive compensation performance sensitivity of state-owned enterprise, hoping to provide theoretical reference and experience basis for improving the system of state-owned enterprise executive compensation incentive and promoting state-owned enterprise executive compensation incentive effect. Using combined method of theoretical analysis and empirical research,this paper studies the relationship between executive compensation and corporate performance of state-owned listed companies under the background of compensationregulation.This paper includes five chapters. The first chapter is the introduction; mainly elaborates the research background, significance and research method, puts forward the creative points and summarizes the framework of this article. The second chapter defines the concepts such as executive compensation, compensation regulation,compensation performance sensitivity, and reviews the related literature. The third chapter explains the power executive compensation performance sensitivity by using the principal-agent theory, the optimal contract theory and the management power theory. Through theoretical analysis, this chapter puts forward research hypothesis and then designs the study model according to the hypothesis. The fourth chapter is mainly empirical test. Firstly, this chapter carries the statistical analysis of each representative Index of executive compensation performance sensitivity and compensation regulation respectively; secondly, conducts empirical test about the influence on executive compensation performance sensitivity which process of Marketalization and compensation regulation have by using regression method; finally, conducts robustness test. The last chapter is to sum up the research conclusion of this paper, put forward feasible suggestions accordingly, and then state the deficiency and prospect of this article.The research conclusion of this article include the following points:(1)compensation regulation will have distorting effect on executive compensation performance sensitivity;(2) the Marketalization will improve this distorting effect;(3)the influence and effect on the central enterprises executive compensation performance sensitivity is greater than that on the local enterprise;(4)Committees can improve the company's internal control system.Based on the results, the paper puts forward the following Suggestions:(1)Continue to promote market-oriented reforms, and create a fair and orderly environment;(2)Carry out differentiated compensation control, and improve the corporate Governance of state-owned enterprises;(3)Establish the performance appraisal system,the executive pay should be linked to the company performance;(4)Continue to promote the establishment of special Committees, andimprove the company's internal control system.