Intra-firm Compensation Gap,Management Shareholding Ratio And Hidden Corruption Of Executives

The financial tsunami triggered by the subprime mortgage crisis in 2008 caused academic discussions on “middle income traps and high-income black holes”.The issue of fair income distribution has become an important topic for discussion in the 21 st century.Nowadays,what is placed in front of the people of the world is no longer how to expand production capacity,but how to make a reasonable distribution of wealth.In this case,the relevant departments issued a series of policies such as the“Limited Pay Order”.However,the incidents in which the executives of the listed companies paid for high prices were frequently exposed,triggering academics’ high concern for executive compensation.With the disclosure of compensation information and the widening income distribution gap,the internal comparison of compensation contracts has become a hot topic of theoretical research.In many agency problems,executive corruption has attracted much attention.Since the "18th National Congress of the Communist Party of China" was held in 2012,a new upsurge of anti-corruption has been set in our country.As many senior executives have "fallen horses",the issue of executive corruption has also become a hot topic of concern for all walks of life.Obviously,executive corruption is a social malpractice.It not only damages corporate value,but also wastes social public resources,thus hindering the healthy development of China’s economy.Therefore,in order to avoid the waste of public resources and promote the sustained and healthy development of the economy,the work of corruption management cannot be delayed.Under this special circumstances,whether can we find a reasonable way to combine the internal pay gap with the issue of executive corruption to consider,becomes a new research perspective and issue.According to the classification methods of existing scholars,executive corruption can be divided into two types: explicit corruption and implicit corruption.And we speculate that the hidden corruption of corporate executives will be closely related to the internal pay gap.In other words,the greater the internal pay gap,the more serious the hidden corruption of executives.This paper reviews the relevant research literature at home and abroad to determine the research perspective.Explain related "information asymmetry theory","championship theory" and "behavior theory".Based on this analysis logic,the article takes the 2010-2016 China-Shenzhen A-share non-financial listing as a research sample,and empirically studies the relationship between the internal compensation gap and the hidden corruption of executives,and introduces the management shareholding ratio.To examine the relationship between the shareholding ratio of the management and the implicit corruption of the executives,and the regulatory effect of the shareholding ratio of the management on the relationship between the internal pay gap and the implicit corruption of the executives.In addition,on the basis of clarifying its mechanism of action,research hypotheses are proposed,and empirical research and analysis are carried out.The research results of this paper show that:(1)The greater the internal salary gap,the more serious the implicit corruption behavior of executives.(2)The proportion of management shareholding(by giving management a certain amount of equity incentives)can reduce the occurrence of hidden corruption of executives,and negatively regulate the internal pay gap and the recessive corruption of executives.(3)Further research shows that the internal compensation gap is significantly negatively correlated with corporate performance,that is,the greater the internal salary gap,the more unfavorable the achievement of corporate value maximization goals.In short,the above research conclusions show that the internal salary gap is too large,which will lead to the occurrence of hidden corruption of executives,thus damaging the overall value of the enterprise.The research contribution and significance of this paper is to explore the relationship between the internal salary gap and the hidden corruption of executives based on a relatively new perspective,and introduce the proportion of management shareholding to explore its internal compensation gap and the hidden corruption of executives.The role of regulation between the two.The study expands the scope and perspective of the internal pay gap and the governance of listed companies’ executives’ corruption,and is also a useful complement to relevant theories.In practice,it is of positive significance to explore the motives of executive corruption and prevent the occurrence of executive corruption.It is necessary to strengthen the governance of corporate executives’ corruption,further promote the reform of China’s compensation system,and give full play to the role of equity incentives and help.