Independence Of The Board Of Directors, Executive Compensation Gap And Company Performance

With the deepening of reform and opening-up, China's comprehensive distribution system by a single system of distribution according to work and gradually evolved into the distribution system and incentive system and performance appraisal system. How we establish a reasonable distribution system in the exploration process is a feeling the stones. In the burst of high pay, people began to reflect on the salary incentive is reasonable or excessive incentive. We should pay a research on whether the pay gap has a positive or negative effect on the performance of the company. Although there is an article to discuss the relationship between pay gap and company performance. But there are few articles to discuss and compare the internal salary gap between executives, executives and employees, corporate performance are together. The structure of the board of directors will affect the salary gap to a certain extent. The percentage fluctuation of independent directors can restrain the gap between executive compensation and its changes. How the change in the board of directors affect the executive pay gap. Since independent directors that was raised for the first time in our country was only a few years, there is a view that independent directors can provide more security for the company's employment contract. With this question, we also think that whether the board of directors independent of the salary incentive mechanism has significant effect. And we analyze the above issues from the perspective of the nature of state-owned enterprises.In this paper, the theoretical analysis and empirical research of the compensation gap, the board of directors and the corporate performance would be divided into five parts. The first part introduces the research background, elaborated on the executive compensation gap, independent of the independence of the board of directors and corporate performance, as well as the research content, research framework, research ideas and methods. The second part will be available on the pay gap, the board of directors of literature on the relationship between independence and corporate performance review, as a theoretical basis for the research hypothesis. The third part of this paper proposed the hypothesis and created models, collect the Shanghai and Shenzhen two kinds of A shares data and remove some unwanted data. The fourth part will obtain the empirical analysis of the research samples. The fifth part summarizes conclusions of this study and put forward relevant countermeasures and suggestions as well as the shortcomings and prospects for future research.Study found that firstly the relationship between executive pay gap and corporate performance is positively related to the relationship effect in the nature of state-owned enterprises. Secondly, the gap between executive pay gap and the compensation gap between executive and employee will decrease with the increase of the proportion of independent directors. Thirdly, the independence of the board of directors has weakened the role of the relationship between executive pay gap and corporate performance, and the relationship between executive pay gap and corporate performance.After the research between independence and compensation gap and company performance relationship, we found that the widening gap between executive compensation incentive measures are effective. Independent directors, in a certain extent, can promote the fair of pay contract. But the independence of the board of directors is not conducive to the pull through high executive pay gap to enhance the performance of the compensation incentive mechanism.