Abstract: When the monopolistic advantage being introduced into the modified optimal contract model, it can be found that the monopolistic advantage has an amplification effect on the executive behaviors of state-owned monopoly enterprises. Only by including the monopolistic advantage in the remuneration contracts, can the problem of the distorted executive compensation resulted from the amplification effect be solved. This paper selects the relative data from state-owned monopoly enterprises during 2001-2010, estimates the executive contributions of the state-owned monopoly enterprises by making use of the difference values between the actual performance and the expected performance, and conducts a test on the rationality of the executive remuneration contracts of the state-owned monopoly enterprises through the matching degree between executive contribution and executive compensation. The study finds out that the existing executive compensation contracts in state-owned monopoly enterprises are not reasonable, mainly in the form of receiving higher compensation with less contribution.

Key words: state-owned monopoly enterprise; executive compensation; executive contribution; monopolistic advantage