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Incentives and constraints of top managers of state-owned enterprises in China

(A) the incentive mechanism of the problem

1, the incentive mechanism of the intensity of insufficient

First, the incentive of large state-owned enterprises of the top management of the lack of small and medium-sized enterprises is more prominent than the general small and medium-sized enterprises, the behavior of these large enterprises itself is more standardized, the top management of the ability to self-restraint; at the same time, by the constraints of the national distribution policy, as opposed to local At the same time, constrained by the national distribution policy, they are not as flexible as local small and medium-sized enterprises in general, so their incomes are generally on the low side. Secondly, the main top managers are less incentivized than the general top managers more prominent, egalitarianism is more difficult to break in the enterprise management, many enterprises in the reform of the distribution system, the staff of the pot broke, but the management of the pot continues to retain, the main top managers and the general top managers of the income gap is relatively small. Thirdly, the more excellent the top management of the enterprise is not enough incentives. This is mainly because of the more stringent management of enterprises, the more standardized income of senior managers, self-restraint is also the stronger, often more political honor, but the economic income is relatively low.

2, the incentive mechanism of a single way

Most of the top managers of state-owned enterprises is a low salary and a small bonus, or at the end of the year according to business performance to give a one-time incentive. A small number of enterprises in recent years began to implement the annual salary system, but not perfect, such as only one-sided will be issued every month, the end of the year more than a simple way to be regarded as the annual salary system, or when the executive as a little bit of money as a reason for helplessness. In the market economy, stock options, shareholding of operators and other effective ways, only in some areas of a few enterprises to explore. A single incentive method limits the full play of the role of top management. At present, there are three main forms of incentives that can play a better role in China: annual salary system, equity system, monetization of job consumption. From the pilot situation, in addition to the annual salary system has been in many provinces and cities gradually pilot, promote, the rest of the incentives used less, equity incentives only in a few enterprises in individual cities. Pilot monetization of job consumption is even less. And some other means of incentives, such as retirement, medical care, job subsidies, and so on, and as labor insurance to see,? Egalitarianism? The more serious, did not make it really become a means of incentives.

3, short-term incentives to strengthen and long-term incentives are not enough

Generally speaking, wages and bonuses or annual salary system, the focus of incentives is the current business performance, belong to the short-term incentives, the incentives in this regard in recent years generally strengthened. But if the operator is one-sided pursuit of short-term interests may affect the long-term development of the enterprise. Many decision-making behaviors often need a few years to show the results, if there is no corresponding long-term incentives, may induce the top management of short-term behavior to the detriment of the interests of the contributors. Many long-term incentives, such as stock options, share ownership, etc., are difficult to implement for the time being due to the lack of supporting policies.

4, executive income distribution is not standardized

Rewards for top management with a certain degree of arbitrariness, rewards and business performance how to correspond to - that is, the measurement and evaluation of the performance of executives, and did not carry out the scientific design, that is, the lack of incentives. There is no scientific design, which means that there is no basis for incentives. It is difficult for senior managers to form stable expectations, so the incentive effect is limited. Due to information asymmetry, after shareholders hire executives and sign the contract, usually shareholders can not observe the performance of executives, but can only be evaluated by part of the operating results, such as profits, sales, etc.

The performance of executives in the company has not been evaluated by the shareholders.

5, executive pensions are too low, after retirement life can not guarantee

Foreign state-owned enterprises, senior managers are generally entitled to additional health care, life insurance coverage and increased pensions to ensure that senior managers have a sense of security. In many areas of China, the policy for senior managers after retirement is the same as that of ordinary workers. Due to the greater economic loss after retirement, the top managers not only have difficulty in psychological balance, but also bring a lot of pressure on the spirit, so that they are concerned about the post-retirement life. The phenomenon of "59 years old" is related to this phenomenon. Can not be said to have a certain relationship with this.

(2) The problems of the binding mechanism

1, state-owned enterprises have not formed an effective corporate governance structure

State-owned enterprises after more than a decade of reform, in the enterprise system, still has not made substantial progress, the state-owned shares? The lack of owners? The problem still exists. According to the modern enterprise system requirements for the transformation of state-owned enterprises into a corporate system, its property rights relationship is still very vague, the formation and operation of the corporate governance structure is still very unstandardized. Government departments at all levels, state-owned holding companies and various types of state-owned property rights on behalf of the state-owned assets through a variety of ways to be clearly defined as the main body of investment, property rights relationships further clarified and defined, but is still not the real owner. In the enterprise, the general meeting of shareholders, the board of directors, the supervisory board and the manager of mutual checks and balances of the mechanism did not play a role, some enterprises, chairman of the board of directors, general manager of a person with two positions, a person said, the board of directors and the manager of the leadership team is highly overlapping. Has not yet formed a new type of restraint mechanism that is relatively independent of each other and mutually binding. This also weakens the owner's supervision and constraints on executives. The selected managers do not have the real business talent, resulting in poor business operations, the formation of decision-making contrary to or to the detriment of the interests of shareholders and so on.

2, the enterprise insider control is serious, the supervision and restraint mechanism is weak

The current state-owned enterprises restructuring of a prominent problem is that top managers have too much power, and the main body of supervision - shareholders and the board of directors to monitor the ability to weaken. The top management has the actual control and is not subject to constraints, it is possible to secretly reap the benefits of personal interests and damage the interests of other stakeholders in the enterprise. The main manifestations of this are excessive on-the-job consumption, short-term behavior, over-investment without economic efficiency, and difficulty in raising new capital at a lower cost. In addition, the agency class, mainly the legal representative, exercises control over the enterprise through administrative decentralization by higher authorities or in violation of principles and policies. The abuse of control by insiders in the agency layer of state-owned enterprises is manifested in the following ways:

(1) The executives in the agency layer try to get rid of the control of the higher authorities by restructuring the company, and centralize the power to control the people, money, goods, production and sales, and exclude the dissidents, so as to control the sky with one hand.

(2) Share the benefits, come up with all kinds of ideas to embezzle public property, instructing the relevant personnel to carry out accounting and financial processing.

(3) production and management, short-term behavior is prominent, only consider the immediate achievements, status and interests, do not consider the long-term interests and development of the enterprise. For example, the project does not undergo a rigorous feasibility analysis of the massive debt, over-investment; in order to get kickbacks, go abroad irresponsibly to buy equipment at high prices, underestimate the assets, and engage in joint ventures, and so on.

(4) Disclosure of information is not standardized, arbitrary accounting technology processing, and even major business activities do not give due explanation, the lack of democratic management.

(5)? The first time I've seen this, I've seen it in my own life. Excessive, there are a lot of public money to eat, drink, travel and waste phenomenon, etc. [16].

3, the market and external supervision and constraints mechanism is weak

As China's market-oriented reform is not long, the managerial market is in its infancy, the vast majority of senior managers are still appointed and dismissed by administrative intervention rather than market choice, there is a senior management can not be on the phenomenon of the next, the compensation does not reflect the supply situation. In the process of supervision of enterprises, the disciplinary inspection and supervision departments sometimes only stop at accepting reports from the public, investigating and dealing with problems superficially, and neglecting to investigate and deal with the problems of dereliction of duty, decision-making errors, and low economic management ability. In addition, engaged in bank credit, asset evaluation, accounting and auditing of social intermediary organizations to monitor the lack of due role.

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