Management compensation incentive and restraint mechanism on the equity open-end funds

To analyze the fund management compensation incentive and restraint mechanism,it empirically examed the relationship between the equity open-end fund management compensation and performance based on the static panel data model.The results show that fund management compensation incentive and restraint mechanism in China is not working effectively.So it made some improvements to existing contract using the principal-agent theory.It introduced excess return which reflects managers' effort level to measure fund performance,and designed a mixed management compensation contract which combines the fixed fees with floating compensation.In the last,it verifies the superiority of the mixed one in promoting fund managers work harder by comparing fund managers optimal effort level of the two contracts in the same pay cost.