Executive（CEO）compensation is a very important topic in company law。The problems of executive compensation reflect the problems of the traditional corporate governance。The regulating of the execesive and unreasonable executive compensation becomes a very important research project in modern company law。
In this book，the author points out that the problem of executive compensation is caused by the lacking of the controlling of the shareholders to the company affairs。Such leads to the lacking of the independence of the board of directors。With the expansion the executive（CEO）power，the executive can take advantage of the rent extraction to persuit for more compensation。So，the problem of executive compensation emerges。Executive compensation used to be ideal tool to alleviate the agency cost between the shareholders and the executive，and now，it becomes another kind of new agency cost to the company。Because the main cause of the problem of executive compensation is the defect of due procedure of compensation negotiation，so the key of the regulating of the compensation should focuse on the faireness of the procedure of the negotiating of the executive compensation，aiming to ensure the fairness of the executive compensation itself。
In this book，the author holds out that executive compensation is the inner problems of the company，which belongs to the board's business judgment。So，the problem should be settled through the mechanism of the corporate governance by divisionalizing and balancing of the corporate power。But the executive compensation is also the problem of social affairs，if it can not be correctly settled by the corporate democracy and it affacts the social equality and market efficieny，it is the time for the government to intervene it。The authous thinks that government should guarantee the efficiency of the corporate governance and to guarantee the rights of shareholders and to help shareholder to get the substantial control of the executive compensation affairs。
In this book，the authors holds out that the problems of executive compensation also reflexs the inefficiency of the board of directors in the course of CEO compensation decision。It is the passivity of the board and being captured by the executives that cause the board cannot to fullfill the duty of the supervision to the executive。In this way，in order to activate the board，the most important thing is to cut off the connection between the board and the executive and to make sure that the hiring of the direcotores，the directores' compensation and so on not to be influenced by the executive of the company。In order to activate the board， the authors advocates that we should offer the board surfficent compensation，especially the stock-based compensation。In order to get rid of the information barrier to directors，we should reform the compensation consultant system，including the hiring of the compensation consultant and the disclosure of the function of the compensation consultant，which of most important is to avoid the conflicts of the interests in the company affires。
In this book，the author thinks that the discosure of the executive compensation information is the way of proving the legitimacy of executive compensation。The authors insists that we should disclose the information intensivly and extensively and we also should concentrate on the procedure of the executive compensation decision，especially on the relationship between the compensaton and the performance of the company。All compensation information should be of broad，intuitive and comprehensible。The aim of all of this is only to guarantee the right to know of the shareholders and the effect of the disclosure is to gurantee of the transparency of the proecedure of the executive compensation decision，which will be indispensable to the reasonableness of the compensation itself and the key issue of the executive compensation problems。
In this book，the authors suggests that the best way to regulate the executive compensation is to put shareholders in the center of the executive compensation issues。We should empower shareholders the right ot vote on executive compensation affires which is closely related to the interersts of themselves。The righte of voting will enstrengthen the shareholders' control on executive compensation and to overcome the structural bias of the board in the decision of executive compensation。According to different part of executive compensation content，the shareholder can use the binding vote and non-binding vote to express the satisfaction and dissatisfaction on the board's executive compensation decision。
In this book，the authours thinks if the executive compensation problems can not be settled by the corporate democracy，the court should become the last resort to the shareholders to regulate the excessive and unreasonable executive compensation。The court also should pay its important role in the juridical review on the reasonableness of executive compensation。In the derivative suit lauched by shareholder for the exeucitve compensation，the cause of action include the breach of duty of care and the waste of the corporate asserts。In the procedure of executive compensation dicision，the board of directors did not behave in informed basis or in good faith or in the honest belief for the best interst of the company，in this way，the board's compensation dicision can not be protected by the business judgment rule。Besides，if there is no consideration between the compensation and perfomence of the company，this kind of executive compensation will constitute the waste of corporate asserts，which will be short of legitimacy and can not get the support from the court。The judicial review on executive compensation will play an important role in the supervision of the abusal of the compensation and to have a chech on the reasonbalness and legitimacy of the executive compensation。
In a word，the author thinks the problem of executive compensation is not the problem of how much to pay the executive，but how to pay the executive。The legitimacy of the executive compensation lies not in the aumout but in the procedure of the decision of the compensation。The key of the resolution to the problem of executive compensation lies in the guarantee of the due process of the compensation decision。
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