Study On The Influence Of The Board Heterogeneity On The Salary Gap Within The Company

With the listing Corporation executives’high salary was widely reported in the media, the fairness of the company internal compensation caused heated discussion in society. Internal pay gap within the company includes not only the gap between executives and staff but also the gap inside executives. Justifiable differences in pay can play a very good incentive effect on both executives and general staff, but unreasonable pay gap will affect the enthusiasm of the staff, and then influence the value of enterprise. Therefore, it is very important that how to guide the company establish the pay gap scientifically and reasonably within the company. There are many factors affecting the salary gap, including the company’s external factors such as the level of economic development, legal environment, and internal factors such as the level of corporate governance. Board is a key element of the corporate governance structure, has direct decision on the executive compensation, so this article puts forward the following research questions:whether board characteristics affect the pay gap within the company? How it will affect the enthusiasm of managers and employees, and then have a far-reaching influence on the enterprise performance?This article measures board heterogeneous mainly from four aspects: structure characteristic, incentive characteristics, behavior characteristics, and constitute characteristics. By selecting the2009-2013A shares listed Corporation from Shanghai and shenzhen stock markets of China as research sample, and manually collected data about "whether to set up a Remuneration Committee", we use the empirical research method to analyze the influence of board heterogeneous on executives-employees pay gap and internal gap among executives, and how the salary gap affect firm performance. This article draws the following conclusions:(1) If chairman and CEO is not the same person, compensation gap within the company will be smaller;(2) The more directors are paid, the larger salary gap between executives and employees, also among executives;(3) The more times board meetings are hold, the bigger pay gap between executives and employees, but the smaller gap within executives;(4) The compensation Committee can helps to reduce the salary gap within the company;(5) The higher proportion of independent directors, the smaller pay gap between executives and employees, also within executives;(6) The pay gap between executives and employees has a negative impact on firm performance, but within the executives, it can improve the value of enterprise. The main contribution of this paper is to examine the existence of board characteristics can influence the salary gap, which has laid an empirical foundation to improve remuneration management from the board governance level.