TMT Pay Gap With Firm Performance Internal Mechanism

Top Management Team(TMT) is the core of the enterprise, because they are free to configure the main resources of enterprises, enterprise performance and future growth naturally dominated by its decision, the TMT is extremely important role in the enterprise. In academics and practitioners, on how to establish mechanisms of TMT pay a universal concern. Many scholars and researchers have found that by TMT to develop a reasonable pay gap can effectively mobilize the enthusiasm of their work, and ultimately to improve business performance goals.Therefore, the analysis study on the impact of internal corporate TMT pay gap Listed on enterprise performance, can provide a better reference for the development of a more rational system of remuneration.At present, there are two theories about pay gap is relatively mature theory, the tournament theory and behavior theory. Although the tournament theory and behavior theory this paper studies the TMT pay gap and the relationship between the corporate performance,but did not reveal its internal mechanism, related research is also relatively rare.Given the investment decision-making is one of the most important decisions of enterprise business activities, so this paper selected the perspective of enterprise investment behavior, the TMT internal pay gap's influence on the enterprise investment behavior and performance and the influence degree, enterprise investment behavior within the TMT pay gap between the role of influence on enterprise performance, tries to reveal internal TMT pay gap between the inner mechanism of the influence on enterprise performance.This paper reviews and summarizes the relevant literature, and draw conclusions prior to tournament theory and behavioral theory, in-depth study TMT pay gap inside the internal mechanism of performance of a firm and the degree of influence.Taking the data of Shanghai and Shenzhen A-share1118 listed manufacturing enterprises of 2013 as a sample, this paper is to make a research on the influence of Internal pay gap of executives on investment and company performance. The findings discloses that, to some extent, widening compensationgap among executives promotes enterprise for more positive investment, higher business investment level, and performance, however, it has little possibility to improve investment efficiency, which means the expansion of business investment will not drive investment efficiency. In the samples of different ownership,widening the pay gap is significant to investment of Non-state-owned enterprises,while it is of little importance to state-owned enterprises. The research results makes an elaborate analysis of the inherent effect of internal pay gap to enterprise performance, bringing enlightenment on the design of compensation of executives from Chinese listed manufacturing companies.