Contributing Factors On Compensation Dispersion Of Top Management

The pubilc and the media have paid more attention to the compensation of top management. Besides, the related rules about information disclosure have been perfected. These two phenomena lead to the perfection of top management incentive plans in China's listed companies. From the angel of compensation dispersion and by analyzing the data of China's security market, this dissertation empirically examines the factors affecting the compensation dispersion of top management of China's listed companies. Our results provide useful information for the reform and development of those top management incentive arrangements in the future.In theory, the behavioral view and the toumament view have totally different conclusions about compensation dispersion of top management. According to these two theories, this dissertation establishes a theoretical framework and examines the suitable theory about compensation dispersion of top management of China's listed companies. Furthermore, this dissertation makes further efforts to examine the factors influencing the compensation dispersion of top management of these companies. The conclusions include: (1) the compensation dispersion of top management of China's listed companies is consistent with the operation of toumaments; (2) ownership structure and board governance structure markedly affect compensation dispersion of top management. The higher the stated-owned shares are, the smaller the compensation dispersion is; while board size, the percentage of directors who hold corporate stock equity seated on board, the percentage of independent directors and company size each has statistically significant positive relationship with the compensation dispersion of top management; (3) firm performance and authority of top management, such as the fact that CEO seated as board chair simultaneously, ownership of top executive, age and job tenure, have no statistically significant correlation with the compensation dispersion of top management; (4) in the analysis by industries, the model reveals significant results merely in agriculture, manufacturing industry and realty industry.