research-article

Standardization of compensation for senior executives and limited intervention of law

  • LI Jianwei
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  • Institute of Commercial Law, China University of Political Science and Law, Beijing 100088, China

Published date: 05 Jun 2009

Copyright

2014 Higher Education Press and Thomson Reuters

Abstract

The determination of corporate executive compensation is a kind of affiliated transactions including special conflicts of interest in the company. The regulation of executive compensation by law is extremely necessary but plays a limited role, and the scope and mode of such role are specific. The due process and information disclosure system in determining executive compensation prescribed in company law and securities law, the policy guidance of the tax legal regime, and the active and prudential judicial review are the three aspects of the regulation of executive compensation by law, the common goal of which is to ensure and enhance the correlation between executive compensation and corporate performance, i.e., the realization of the principle of “performance-based compensation.”

Cite this article

LI Jianwei . Standardization of compensation for senior executives and limited intervention of law[J]. Frontiers of Law in China, 2009 , 4(2) : 236 -257 . DOI: 10.1007/s11463-009-0014-3

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