On Executive-employee Compensation Gap And Corporate Performance

Over a period of time,chaotic phenomena such as overpriced salary,salary and enterprise performance upside-down have occurred frequently in Chinese enterprises.Since 2014,the state has issued a series of policies and measures to restrict the executive power and salary level of state-owned enterprises.To a certain extent,they have regulated the executive power behavior and salary methods of state-owned enterprises.However,there are obvious differences in executive power and salary level among private enterprises,which results in great differences in executive-employee compensation gap among different private enterprises.At present,there are great disputes and divergences of opinions on the rationality of executive compensation level and the impact of executive-employee compensation gap on corporate performance.It is urgent to strengthen theoretical and empirical research on these issues.The paper analyzes the mechanism of executive-employee compensation gap caused by executive ability and power,and analyzes the mechanism of executive-employee compensation gap on corporate performance.Taking Shanghai and Shenzhen A-share manufacturing listed companies from 2013 to 2017 as samples,this paper makes an empirical analysis of the executive-employee compensation gap caused by executive ability and power,and the impact of executive-employee compensation gap on corporate performance.It enriches the research content of internal compensation in Chinese enterprises,and provides reference information for the state and corporate to regulate corporate executives' power behaviors,compensation methods and corporate governance.Empirical research finds that: the executive competence of listed companies has a significant positive impact on executive compensation level,employee compensation level and the compensation gap between them.The stronger the executive competence,the higher the salary level of executives and employees,but the salary growth rate of executives is significantly higher than that of employees,and the compensation gap between executives and employees will expand accordingly.The executive power of listed companies has a significant positive impact on the salary level of executives andemployees.The executive power of listed companies has a significant positive impact on executive-employee compensation gap.The executive power has a significant positive impact on executive salary.The influence of executive power on employee salary level is basically negative.That is,the greater the executive power,the higher the salary,the lower the employee salary level and the corresponding compensation gap between senior executives and employees.The compensation gap is different because of the difference of executive competence and power variables.The executive-employee compensation gap caused by the executive competence of listed companies has real incentive effect,which meets the expectation of the tournament theory.The executive-employee compensation gap caused by the executive power of listed companies does not have real incentive effect,on the contrary,it aggravates the unfair and unreasonable salary distribution within the company.It meets the expectation of behavioral theory.On the basis of theoretical and empirical research,combined with relevant research results at home and abroad,the paper has targeted the strengthening of executive capacity building and exerting the positive role of senior management;rationally controlling senior executives' power behavior and preventing executives from expanding;The three aspects of setting the executive-employee compensation gap are proposed to improve the management level and governance ability of the enterprise and improve the corporate performance of the company.