Research Between Pay Gap Of Top Management Team And Corporate Performance Of State-owned Listed Companies

Throughout the ages, human resources have been called the first resource, the mostimportant resources,so top managers are the enterprise’s core resources,which should be the keyelements of corporate governance,at the same time,the top managers who have been reasonablyeffective pay incentives can make more contributions to their enterprise,so executivecompensation incentive problem has been the hot issues of academic research. Throughoutexecutive pay incentives research, more research focused on executive pay level, but the salarystructure of the research is not very good,so executive pay gap as the focus of the structure ofsalary research is bound to the importance of research. Executive compensation incentivesultimate goal is to improve the company performance, achieve the goal of maximizing the valueof the company, executive pay gap will naturally need with corporate performance together, sothis paper is to study the effect of executives compensation gap on the company performance.Currently the relationship between the two variables is divided into the Tournament Theorywidening the compensation gap and Behavioral Theory limiting the compensation gap,so therelation in our countries between the two variables is not yet conclusive,so studying the relationshas certain theoretical value.This paper selects the State-owned Listed Companies with specialinstitutional background as study samples,which are more specific. The results between the twovariables can guide the executive compensation system’s reforming and perfection.If the paperjust simply researches the relationship between them,it does not seem very convincing,so it joinsthe regulating variable-board structure, then it will study managerial power’s regulatingfunctions between executive compensation gap and corporate performance,which can make thestudy more comprehensive and perfect.This paper selects the State-owned Listed Companies data of A share market from listedcompanies which are listed in Shanghai Stock Exchange and Shenzhen Stock exchange from2006to2010，through researches it finds that executive compensation gap can promote corporateperformance,which verify the applicability of Tournament Theory in Chinese state-owned ListedCompanies. This paper selects financial performance and market performance to measurecompany performance, through the correlation analysis and regression analysis, it is concluded that executive pay gap and the company performance is significant positive correlation.According to the different nature of the final control person,the paper puts the state-owned ListedCompanies full-sample into two sub samples which contains“under the State Council”and“directly under the local government”.Though the research it finds the correlation betweenexecutive pay gap and Corporate Performance in the “under the State Council”is better than thatin the “directly under the local government”.It also selects the regulating variable-the proportionof independent directors,this was used to study the regulating function between executivecompensation gap and corporate performance,which has negative regulatory role.Finally, according to the results of empirical research, combining with the actual situation ofthe state-owned listed companies,it gets some conclusion such as widening executivecompensation gap,all this can make certain theoretical guidance for improving corporategovernance capabilities of the State-owned Listed Companies.