An Empirical Study On The Relationship Between Executive Compensation Gap And On-the-job Consumption In The Process Of Marketization

The management of executive pay gap and on-the-job consumption has always been the focus of theory and practice.Senior managers are scarce human resources,and they have reasons to earn higher salaries than average employees based on their personal talents and contributions.According to the incomplete contract theory,the executive incentive contract cannot be clearly defined in any way.In-service consumption and other implicit incentive contracts are born in modern enterprise system.Thus,executive pay gap and in-service consumption should be included in the incentive contract combination.Nowadays,the market-oriented reform in China has become more and more deeply.It is of great practical significance to study the application of executive pay gap and on-the-job consumption in incentive contract combination from the aspect of marketization.Based on the theory of principal-agent,incomplete contract theory,asymmetric information theory and tournament theory,this paper makes a theoretical analysis of the relationship between executive pay gap and on-the-job consumption in the marketization process,and puts forward the research hypothesis.Then a statistical model is designed and the research hypotheses are tested empirically.Based on this,this paper discusses the research conclusion and puts forward some policy suggestions.In addition,this paper points out the deficiency of this research and the possible future research directions.In the research 5,070 observations from 2013 to 2015 of 1690 A-share listed companies are obtained.And the following conclusions are drawn after studying.Firstly,there is a substitution effect between executive pay gap and on-the-job consumption.And the substitution effect between the executive pay gap and the on-the-job consumption in the state-owned enterprises is stronger than in the non-state-owned enterprises.Furthermore,in the process of marketization the relationship between executive pay gap and on-the-job consumption can be concluded as follows.With the improvement of marketization process,the substitution effect of executive pay gap and on-the-job consumption is weakened.And the substitution effect weakens less in the state-owned enterprises than in the non-state-owned enterprises.Therefore,this paper puts forward the policy suggestions from the aspects of optimizing incentive contract combination,deepening the reform of state-owned enterprises and promoting the marketization process.