Research On The Relationship Between Internal Pay Gap And Corporate Performance Of Listed Companies In China

The internal salary design problem has become a key issue in the theoretical and practical circles since the 1980 s,because the salary gap directly affects the work mood of employees within the company,which in turn affects the performance of the entire company.However,most of the existing researches only discuss the relationship between the salary level of senior executives and company performance.However,there are relatively few studies on the relationship between internal compensation gap and company performance,and the conclusions are not consistent.The internal salary gap involves the fairness of the company's income,and the company's performance involves the efficiency of the company.The relationship between the company's internal salary gap and the company's performance is actually the relationship between the company's income equity and the company's efficiency..Since the reform and opening up,China's economic level has developed rapidly,and the wealth of cakes has grown bigger and bigger,but it has been followed by uneven distribution of wealth in China,and the “high-price annual salary” incidents of state-owned enterprise executives have been repeatedly disclosed,causing concern in the social and academic circles.In order to curb the excessive growth of state-owned enterprise executives' compensation,in 2014,the central government issued the "Opinions on Deepening the Reform of the Remuneration System of the Persons in Charge of Central Management Enterprises",stipulating that from January 1,2015,the implementation of the reform of the compensation system for the heads of central management enterprises will be implemented.The Plan stipulates that the total income of the person in charge of the central enterprise shall not exceed 7-8 times the average salary of the employed employees.This incident provides an excellent natural experiment for us to study the relationship between the internal salary gap of listed companies in China and the performance of enterprises.Firstly,this paper will use the sample data of listed companies from 2010 to 2017 to analyze the relationship between the internal salary gap of listed companies and the performance of enterprises.This paper adds a quadratic item of salary gap to the internal regression model.Whether there is an inverted U-shaped relationship between the pay gap and corporate performance.The final conclusions show that except for the relative salary gap between executives and the company's performance is weakly positively correlated,other types of salary gaps and enterprise performance show an inverted U-type relationship;most of the listed companies in China are less than the optimal salary gap,so China is absolutely The internal compensation gap of most listed companies is positively related to corporate performance.In addition,the impact of equity concentration,financial leverage ratio and management shareholding ratio on corporate performance is positive,but the proportion of independent directors and the number of employees of the company are The performance impact is negative.Then this paper analyzes the relationship between the internal salary gap of listed companies and corporate performance in China using the natural experiment of “limit pay order” of central enterprises in 2015.Specifically,we first use the data of A-share listed companies in 2012,2013,2016 and 2017 to analyze whether the internal wage gap of state-owned enterprises will decline before and after the implementation of the 2015 salary limit policy,and then use the mediating effect on the type of internal compensation gap that falls.The model analyzes whether the “restricted salary order” in 2015 affects the performance of the enterprise by affecting the internal salary gap of the state-owned enterprise,and then proves the relationship between the internal salary gap and the enterprise performance.The study found that except for the relative salary gap between executives and the company's performance is weakly positively correlated,other types of salary gaps and enterprise performance show an inverted U-type relationship;the optimal salary of executives and ordinary employees is greater than the salary limit In the 7-8 times requirement specified in the regulations,if the salary limit effectively reduces the relative salary gap between the executives and the employees,the performance of the company will decline;the salary gap of most listed companies in China is less than the optimal salary gap,so The internal salary gap of most listed companies in China is positively correlated with the performance of the company;in addition,the influence of equity concentration,financial leverage ratio and management shareholding ratio on the performance of the company is positive,but the proportion of independent directors and the number of employees of the company The impact on business performance is negative.