An analysis of factors affecting management compensation of power enterprises

This paper selects power enterprises in 2004–2008 Shanghai and Shenzhen as the sample and empirical analysis of the influence factors of management compensation on the sample companies. This article supposes 6 independent variables and study the relationships with management compensation. The empirical results show that enterprise scale, location of the enterprise, compensation committee, ownership balancing degree, age of senior managers are positively related to management compensation, but ROE doesn't make any sense. These results may provide a good view to reform the management compensation. With the result in this paper, we have some suggestions. Power enterprises should improve its scale - pay salary system, make salary structure diversification. Pay attention to long-term incentive plan, perfect the performance appraisal system, make the close relationship between profit and management compensation. Adjusting the government behavior, improve the external environment; cultivate the professional manager market, at the same time.