Executive Compensation Gap, Corporate Risks And Firm Performance

Currently, remuneration reform of enterprises senior executives is undertaking step by step. As an unavoidable issue in the reform, the relationship between the executives and enterprises’ performance is capturing more and more attention and being a heated discussion. Remuneration of executives doesn’t match the performance, lack of salary and welfare system, inadequate regulation, and such issues frequently happen.A lot of literatures have followed specific research on incentive of Comp-gap to enterprises’ performance. Foreign scholars did their researches mostly based on Tournament Theory and Behavioral Theory, but results are discordant. Meanwhile, many domestic scholars also did empirical researches, without agreed conclusion.After reviewing the relative literature, I found the background factors that different enterprises face specific risks is ignored. There is no doubt that top executive remuneration structure will be affected by this. Comp-gap, enterprises’ performance and specific risks should be an organic whole that be researched in one system for a more acceptable.Basing on this point, data of listed companies in a stock market of SHANGHAI and SHENZHEN during 2009-2013 is selected as a research sample to do empirical researches of relationships between Comp-gap, enterprises’ performance and specific risks. By the demonstration research, we can conclude that: Comp-gap has a significant negative correlation with enterprises’ specific risks; without considering risk factors, Comp-gap is significantly and positively correlated with enterprises’ performance, which will be weaken by the existence of enterprises’ specific risks, and Comp-gap even can damage enterprises’ performance in particularly awful situations.The article is ended by the conclusion according to the results of empirical researches mentioned above, and some keys to solve our problems. Of course, the future direction of the research will be presented together.