Executive Pay Equity, Excess Perks And Enterprise Innovation

Since the Third Plenary Session of the Eighteenth Central Committee of the Party,the reform has been comprehensively deepened and steadily progressed,and make a breakthrough.As a big part of the reform journey,the reform of state-owned enterprises has entered a crucial stage of deepening progress.Among them,the pay system reform that takes into account both fairness and efficiency has become the source of vitality for enterprises to improve quality and increase efficiency and develop rapidly.In recent years,related researches have also expanded from absolute pay to relative pay,and pay fairness has gradually become a research topic.Pay equity originates from pay comparison and has important influence on the psychology and behavior of enterprise executives,and it is divided into internal equity reflecting "pay structure" and external equity reflecting "pay level",and can be further divided into favorable unfairness(positive unfairness)and unfavorable unfairness(negative unfairness).Favorable unfairness is equivalent to giving executives more effective explicit incentives,which helps to mobilize their enthusiasm and creativity.Unfavourable unfairness may cause insufficient incentives and stimulate executives to use power for personal gain,and excessive perks is one of the ways.Therefore,for must through in deepening reform to improve their innovation ability of state-owned enterprise,how can the internal and external pay equity change the attitude of executives towards excess perks,which in turn affects executive decision-making behaviors,especially the innovation decision even enterprise innovation behavior,was eventually has a certain research significance and research value.Based on previous research,this paper takes the enterprises that actually controllers’ state-owned property rights from 2009 to 2017 as a sample,and tests therelationship between internal and external pay equity and enterprise innovation through empirical analysis,and explores whether the excess perks is between the two.And combines the "double control" to examine the effect of policy implementation,in order to support the state-owned enterprises in the new era to continuously deepen the reform of the pay system and effectively improve the quality of development to provide an empirical basis.The results show that:(1)Both internal and external pay comparison of executives show that positive unfairness can effectively improve the level of innovation input and the quality of innovation output,while negative unfairness cause the reduction of innovation input and the decline of innovation output;(2)Both internal and external negative unfairness cause an increase of excess perks,while external positive unfairness has a restraining effect,but the internal positive unfairness also increases excess perks;(3)Excess perks has a mediating effect between executive pay equity and enterprise innovation,internal and external negative unfairness lift the excess perks level,hinder enterprise to carry out innovation activities smoothly,for favorable unfairness,the direction of intermediary effect of excess perks is different,favorable internal unfairness cause excess perks rising,favorable external unfairness promote excess perks behavior,both have positive effects on innovation input but no significant effects on innovation output;(4)The mediating effect of excess perks under "double control" has changed,and the implementation of relevant policies has weakened the substitution effect of excess perks on monetary compensation.Therefore,state-owned enterprises must consider the influence of internal and external equity in compensation on the management behavior of senior executives,effectively encourage senior executives to enhance their awareness of innovation,assume responsibility for innovation,and contribute to the future development of enterprises.This paper is based on executive pay equity,considers both internal fairness and external fairness,and takes into account explicit pay and hidden income.And combines the background of "double control" to provide some empirical evidence for enterprises to attach importance to pay equity and improve innovation performance.