Manager Autonomy And Executive Pay Gap Relationship

Managerial discretion is the autonomy of decision-making on the company to operate the actual impact, it is mainly for the manager's effective control over corporate affairs. Managerial discretion for the executive compensation has important implications. In general, the higher the autonomy of company managers, and its impact on the greater value of the company, the greater the risk, and pay for their own decisions have greater autonomy, it can be inferred with high levels of self-manager level should be will widen the pay gap with other executives. Based on the above analysis, this paper, based on the the power to decide theory, the use of empirical methods managers of listed companies on the autonomy of medicine and the relationship between executive pay gap between an empirical test. Simultaneous analysis of state-controlled and non-state-owned holding company, the managerial discretion and the extent of executive pay gap is the same.Research status in the review paper, this paper is based on the theory of the use of managers, agency theory and Hambrick-Finkelstein theory of interpretation of managerial discretion. Then, the paper analyzes the problem of managers measure of autonomy, and based on the determine theory, further discussion the possible impact between the managerial discretion and the extent of executive pay gap. On this basis, the paper establish the linear regression equation which reflects managerial discretion and the extent of executive pay gap, and in 2009 listed 144 pharmaceutical companies as a sample, using SPSS, EXCEL and other analysis software to making an empirical test. Overall test results show that the extent of executive pay gap and managerial discretion has a significant positive correlation. Grouped according to the different nature of the company shares the test results show that non-state-owned holding company, the manager of executive pay gap between autonomy and positive correlation between the performance more closely.Than that listed in China's pharmaceutical companies, state-owned holding enterprises and non state-owned holding enterprises there is a big different mechanisms of executive pay, compensation needs to be improved in the non state-owned holding companies, managers should carefully guard against the use of managerial discretion in pursuit of higher Salary possible.