Impact On Company Performance Of State-owned And Private Listed Companies Executive Pay Gap

Since the economic crisis in2008, the academic community and the public mediahas paid the growing attention to the executive compensation for the executive’s payincrease, while the overall performance decreases and some significant astronomicalexecutive pay. So far, academically, the research on the income gap between managersand employees is quite thorough in and abroad China，but on the basis of property rightsresearch perspective on the pay gap in the executive suites are few. Pay gap existencehas its rationality, conversely may cause adverse effect on firm performance.This paper makes studies on state-owned and private listed enterprises of China,explores coefficients between the executive pay gap and company benefits, in order tofind a practical guidance to other companies. This paper uses the enterprises themselvesfactors, governance factors and external environmental factors in three aspects, andconnecting with the different nature of the property rights of enterprises, to explore therelationship between executive pay gap and corporate performance. Through theempirical analysis:(1) Relative to bear the dual task of state-owned enterprises,for-profit private businesses’ have bigger pay gap than state-owned enterprises;(2)China’s listing Corporation executive pay gap with tournament theory, namely thewidening pay gap for the benefit of the company. While state-owned enterprises are notprivate enterprises incentive effect is remarkable, but has not yet reach the negativeeffects.(3)Region economy more developed, the executive pay gap on corporateperformance positive incentive effect can play better, and this positive relationship inprivate holdings of listed companies is more obvious.The characteristic of this paper is that "property rights" and "executivecompensation index" the two factors with Chinese characteristics are combined in theresearch of executive pay incentive and its effect, and obtain certain valued conclusions.In accordance with the results of empirical analysis, put forward policyrecommendations that can be as a reference and draw value to the incentives of theexecutives in China’s private listed companies.