The Empirical Analysis Of The Effect Of Marketization On Executive Pay Gap

In China the listed companies, the problem of excessively high executive compensation, unreasonable phenomenon of the income distribution between executives and staff, the expansion of executive pay differences in related industry has become a hot topic of social concern. To solve the problem of too large income gap and unfair distribution, the government has introduced a series of related pay policy. But specific limit is mainly about the pay gap between executives and employees, and for industry executive pay gap problem did not make any relevant limit. Based on the above situation, puts forward the following question:why there are so different two attitude and approach towards those two kind of pay gap? Whether has an optimal executive pay gap ratio as a qualified standard? And whether need to regulate the rationality of executive pay gap through the government intervention? To answer the above questions, the paper selects 2007-2013 A-share listed companies as research samples, do the research about the interval effect between company performance and executives-employees pay gap and executive pay gap in the industry, solving the optimal executive pay gap ratio. And further analyze the marketization process can play a reasonable regulation of executive pay gap, and thus discusses the necessity of government administrative mediation executive pay.Existing literature research on marketization and executive pay, mainly concentrated in the level of compensation, and there are lots of blank about the pay gap. And from the reality, in the process of salary system reform introduce market-oriented salary distribution system, hope that through the adjustment of the market to make executive pay both in level and structure of two dimensions is more reasonable. Therefore, combined with China’s system background, study the marketization process for executive pay gap adjustment has theoretical and practical significance. Based on the theory of tournament theory and behavioral theory, executives-employee compensation gap’s influence on firm performance range effect, can find out the optimal pay gap between executives and employees. But due to the unreasonable reason executives-employee compensation gap of our country lies in the defect of the corporate governance structure and purely market-oriented reform effect is limited to the improvement of the corporate governance structure. Therefore, marketization process cannot make corporate executives-employee compensation gap toward the optimal gap ratio change. And based on the behavior theory and motivation, executive pay gap in the industry and corporate performance relationship is not a single linear relationship, but there is an optimal incentive gap. From the perspective of the three dimensions of market standards, with the less government intervention to the enterprise, the higher level of development of factor market, and the development of market intermediary organizations and the legal system environment more perfect, will encourage executive pay gap in the industry spontaneous adjustment more reasonable.In this paper, the empirical results found that:(1) the executive pay gap for company performance incentive exists interval effect, there is an optimal executive pay gap. (2) Relies on the improvement of marketization degree, executive pay gap in the industry will gradually tend to be more reasonable, and for the regulation of the pay gap between executives and employees, can’t just rely on marketization level, also need the government to intervene. (3) The different aspects of the marketization performance is different to the regulating effect of executive pay gap. (4) The corporate governance environment to impact the marketization process regulating executive pay gap.This paper studies the relationship between company performance and executive pay gap, can optimize the structure of executive compensation incentive system to provide empirical evidence. And research on marketization and executive pay gap, help to solve the present stage in the process of the compensation reform by the government to take necessary administrative intervention is reasonable. To deepen the reform of the income distribution system and realize the social justice to provide theory and data support, and provide advice for enterprises pay incentive system and salary system reform in China.