ABSTRACT
This chapter investigates the institutional background, practice and academic research of executive compensation in China. The executive compensation is complicated and establishing an efficient strategy is challenging. The government still plays an important role in deciding the corporate executive compensation plans, especially in State-owned enterprises (SOE). In different stages of the reforms, the level of executive cash compensation was rather low earlier, but it has grown rapidly recently. Level of economic development, capital structure, corporate governance and social networking is believed to influence the level of cash compensation of the top managers. More and more companies published the executive equity incentive plans during 2006–2016. It is found that the stock option plan will influence the corporate financing behavior, investment behavior and R&D decision, as well as the dividend behavior. More recently, the executive compensation gap of the listed companies, especially the compensation gap of SOE, compensation dispersion of top management team and compensation differences between the top executives and the employee have been paid more and more attention.
