The Empirical Research About Effectiveness Of Compensation Contracts Of Listed Companies In China

As the increasing strength of Chinese company in the reforming propellant,more and more corporate are qualified to finance in the capital market.The top managements' compensation contract is special.How to set compensation contract?Many researchers came up with relative suggestion and scheme.But this suggestion does not work well,the public pay a lot of attention to the executive compensation all the time.So,this paper researches the effectiveness of executive compensation based on the following principles that is an effective compensation contract should not only measure the human resource capital value,but also stimulates them to promote corporate performance.Academically,effective contracts can price the human-resource value and incentive the management action to in consistent with the shareholders' benefit.But there exist many interference factors,for instance actual controller's action.Based on above logistic we focus on the following four questions:1.During the process of top management turnover,how do companies select the new executives?How many of these nominators are from the enterprise internal and how many of them from the enterprise external?What are the characteristic of executive compensation?2.As one of the important production factors for an enterprise,does the executive compensation reflect the price of production factors in the market?Do the executive compensations work well in china?3.Are there any differences about the executive compensations in protect industry and competitive industry?4.As the actual controller of enterprises,does government make influence on the effectiveness of compensation contracts?Then,In order to find answers for these questions,the relative papers at home and abroad are reviewed from four aspects,the back ground about compensation in China is reviewed too.Based on the academic and realistic analysis five hypotheses are established.At last,in order to prove those hypotheses,data from 1999 to 2009 is used.The results are as following.From the regression result,the ability of the management has positive relationship of the compensation,and the performance of the public corporate also does.Due to government regulation and market admittance in the protected industries,the compensation contract does not work though market law in those industries.The sensitiveness of the executive compensation is different according to actual controller of the different property.Compared with the private property,that central government is actual controllers reduces the management pay performance sensitivityAt last,the paper proposes following suggestion:(1)propelling the market-oriented reforming;(2)strengthening the change of the government economic function;(3)reinforcing the managers' market and perfecting the corporate governance.