A Multi-level Model Of Influence Of Power And Pay Composition On Executive Turnover In Top Management Teams

The stability of the top management team is very important for the sustainable development of the company.How to prevent the departure of top managers has become a critical issue for the company.The top management team's power and compensation compositional characteristics will influence executives' exit choices.The power and compensation compositional characteristics of the top management team are reflected in both the individual level and the team level.At the individual level,dissimilarities in power and compensation between executives and other executives can have an impact on executive perception;at the team level,the power and pay dispersion in top management team can also affect executive behavior.Studies have shown that individual dissimilarities have a positive influence on executive turnover,but these studies are analyzed from the perspective of demographic characteristics,without considering more deep structural features,such as the power and pay dissimilarities of the executives;as for the direction of power dispersion and pay dispersion in the executive team,the existing research has not reached a consensus,and further research is needed.Based on the social hierarchy theory and equity theory,this paper analyzes the influencing factors of executive turnover from the individual level and the team level.At the individual level,the two characteristics —— power dissimilarity and pay dissimilarity are explored for the impact of executive turnover,and we also explored the moderation role of power and pay.At the team level,we select two forms of social hierarchy,power dispersion and pay dispersion to analyze their influence on executive turnover.This paper takes a sample of 86,271 executives from 12,196 A-share listed companies from stock markets of Shanghai and Shenzhen in 2011-2016 as a sample,and establishes a multi-level model to analyze the data and explore the different roles of power and compensation in executives' departure.The results of this paper show that at the individual level,executives' power dissimilarities have a negative effect on executive turnover,and power strengthens this process,that is,executives with higher power are less likely than executives with lower power.On the other hand,the pay dissimilarities of executives has a positive effect on turnover,and executive pay has weakened this positive effect,that is,higher-paid executives are less likely to leave than lower-paid executives.At the team level,the research reveals that the unequal power of top management team has a negative impact on the personal turnover of executives,and the pay dispersion promotes the personal turnover of executives.The research in this paper provides a new perspective for the dissimilarity research,explains the differences between the dissimilarity in deep compositional characteristics and demographic characteristics,and expands the boundary conditions of individual dissimilarity on executive turnover.The paper also verifies the function perspective of the power-based social hierarchy and the conflict perspective of the compensationbased social hierarchy from the perspective of individual and team,emphasizing the importance of studying the role of basis of social hierarchy.The conclusions of this paper show that in the top management team,the more centralized power structure and the relatively equal pay structure help to improve the collaboration of the top management team and reduce the turnover of senior managers.