The Theoretic Basis of Incentive Mechanism for Senior Managers and Its Implications

摘要

The academic circle has conducted researches on incentive mechanisms for senior managers and their effects on the corporate performance mainly in the frameworks of principal-agent relationship, trading cost, and the contract theory. On the basis of a review of relevant theories, we further analyze the theories and recommend that more theories should be applied when devising senior executive incentive mechanisms. We believe that there exist limits in existent researches on corporate governance, that is, there lack researches on the comprehensive effect of senior executive incentives at different levels, team incentives and individual incentives. On account of that, this paper proposes a concept of "the combined effect of incentives for senior managers".