Managers The Power To Influence The Pay Gap Championship Incentive Effects?

The incentive compensation of top management has been subjected to intensive practical and theoretical investigation since the 80's of last century. But existing studies seldom focused on the compensation dispersion within the top management team, especially lack of deep research on the incentive and economical effects of the compensation dispersion. In recent years, the phenomenon of the managerial power's impact on executive pay contracts has become a new hot spot in the field of management incentive studies at home and abroad.This text studies the issue of the compensation dispersion within the top management team of listed companies based on the institutional background of China, and investigates the transfer mechanism of the incentive effects of the top management's compensation. It testifies the applicability of the Tournament Theory and the Behavioral Theory on the compensation dispersion within top management teams of China's listed companies. Furthermore, it tests the impact of the managerial power of top management, which is the human resource provider and executor of companies' strategies, on the incentive effects of the compensation dispersion within top management teams. The conclusions include:(1) Overall, the compensation dispersion within top management teams of Chinese listed companies is consistent with the Tournament Theory. In other words, there's significant positive correlation between the compensation dispersion within top management team and company's future performance; (2) The managerial power boosts the tournament incentive effects of the compensation dispersion of top management team. Specifically, compared to other companies, the tournament incentive effects of the compensation dispersion of top management team are more prominent at companies with CEO seated as board chair simultaneously, executives with long tenure and dispersed shareholding pattern.