The Study On Relationship Between Executives Pay Gap And Enterprise Performance Based On Different Pay Levers

In recent years,the event of “astronomical salaries” frequently happens,which hasaroused great concern in present society and intensified discontent among ordinarypeople. In order to not only keep a harmonious development of society,but also betterachieve social justice.In2014,the government has issued a salary limit policyspecially for executives of enterprises directly under the centralgovernment.However,until now,the government has not yet issued any relevantpolicies and regulations for executives of private listed companies.The privateenterprises is different from the central enterprises,lacking political background,without resources advantage.The private enterprises have been involving in the tide ofmarket economy, responsible for own profit and loss, operatedindependently, walking through the cruel wind snow and rain baptism tosurvive.Private Listed Corporation needs real talented occupation managers, it’s morenecessary for them to make the reasonable salary system to attract and retain seniorexecutives.The existing researches about pay gap and company performance mostlyconcentrates on all listed Corporation. Articles specially for private listedCorporations are relatively less. More researches focus on the relationship betweenthe two, seldom considering the relationship between pay gap and companyperformance under different pay levels. This paper selects all private listedCorporation in Shanghai A stock market as the research object,study on therelationship between pay gap within executives and corporate performance, and thedifferent effect of pay gap on firm performance under different pay levels. In order tofurther explore, this paper also study on corporate governance factors which affectpay gaps.Through this series of studies,I hope that this paper can provide somesuggestions on making salary policy, reasonably arranging pay gap within theexecutives, better motivating executives to service for the company for private listedCorporation. The main contents of the paper are arranged as follows： The first part is the introduction,describes the research background, significance,research ideas and methods,domestic and foreign literature review,the main contentsand innovative points.The second part introduces the basic theories. Firstly,describesand defines the key concepts in the paper；Secondly, expounds the basic theorys aboutthe relationship between pay gap and corporate performance.The third part introducesaround the research object-private listed Corporation. Firstly, describes thecharacteristics of private listed Corporation and characteristics of corporategovernance structure.Secondly, analyzes the present situation of pay gap in privatelisted Corporation. Finally, analyses the difficult situation of salary management inprivate listed Corporation.The fourth part is the empirical analysis. Empirical studyresults show, executive salary gap of private listed Corporation has a positive effecton corporate performance.Internal managerial pay gap affect corporate performancein different directions under different compensation levels. When the whole ofexecutive compensation is low, the pay gap between internal executives has anegative inhibition effect on the performance of the company, when the whole ofexecutive compensation is high, the pay gap between internal executives has apositive effect on the firm performance.Equity concentration degree has a positivecorrelation with the executive pay gap, the scale of the company also has a positivecorrelation with the executive salary gap. In addition, the overall salary level ofemployees, company profit ability, the number of employees and other factors willalso affect the internal executive pay gap.The fifth part is about the conclusions andpolicy recommendations.Mainly includes making salary rules according to companysituation, the rational use of tournament theory in order to promote the opposite effectof pay gap on corporate performance. Making salary gap combined with executivesteam pay levels, company’s ownership structure, size, pay level,profitability, thenumber of employees,and further perfecting the information disclosure system ofexecutives.The sixth part summarizes the weaknesses of this study ‘s and the futureoutlook. The innovation and characteristic of this paper lies in：Firstly, this paper studythe different influences that pay gap has on corporate performance under different paylevels.Secondly, this paper targeted private listed Corporation as the object of thestudy.Thirdly, this paper has supplementary researches about the influential factorsthat influence executives pay gap.