Executive Team Salary Gap And Corporate Charitable Donation

As an important performance of corporate social responsibility,charitable donation is of great significance to alleviate social problems such as disaster relief,sickness and disability.Since the implementation of the Charity Law of the People's Republic of China in 2016,many companies have joined the donation.The total donations in 16 and 17 years accounted for 65.2%and 64.23%of the total donations respectively.The company has become the main force to promote charity in China.However,profit maximization is the innate pursuit of the enterprise,and its motives for donation under the nature of profit-seeking are also widely concerned by the academic community.The executive team as a business operator has a large amount of free ruling on the formulation of donation decisions,and the internal compensation mechanism has a significant impact on its decision-making behavior.Therefore,it is of great significance to explore the motivation of the senior management team's charitable donation from the perspective of salary incentives..In addition,the decision-making activities of enterprises are not only related to their developers,but also affected by the internal control environment.Incorporating the heterogeneity of internal control quality into the research theme of compensation system and charitable donation will help improve the decision-making of management.Based on this,this paper explores the relationship between executive team pay gap and charitable donation through empirical analysis.Based on the research literature related to charitable donation and executive pay gap,this paper clearly defines the concepts of executive team,salary gap,charitable donation,internal control,and further combines tournament theory,behavior theory,principal-agent theory and The stakeholder theory logically deduces the relationship between the three,expounds the mechanism of the impact of different types of pay gaps on charitable donations and the regulatory role of internal control quality,and makes assumptions based on this.After that,the above hypothesis was verified by constructing a multiple regression model using Ordinary Least Square(OLS).Through empirical analysis,the following conclusions were drawn:?The greater the salary gap(ie,the vertical pay gap)among the different levels of the senior management team,the greater the scale of the company's donation,the positive correlation between the two;?The greater the salary gap(ie,the horizontal salary gap)among the members of the senior management team,the smaller the donation scale of the enterprise,the negative correlation between the two;?The quality of internal control is positively adjusting the positive impact of vertical pay gap on charitable donations,which shows that with the improvement of internal control quality,the vertical pay gap promotes charitable donations more significantly;?The negative impact of the internal control quality negative adjustment level salary gap on charitable donations shows that with the improvement of internal control quality,the negative impact of the horizontal salary gap on charitable donations will be further weakened.Finally,this paper proposes to optimize the corporate salary structure.Policy recommendations for strengthening internal supervision mechanisms,improving the information disclosure mechanism for listed companies' executive compensation and related regulatory systems.The innovations of this paper are mainly reflected in the following aspects:Firstly,the executive team's salary gap is introduced into the research on the influencing factors of charitable donation,and the impact on the donation decision-making is discussed from the aspect of corporate salary incentive system design,so that the scope of traditional research is expanded;Second,the charitable donation level is used to test the economic consequences of the executive team's salary gap,which provides a new perspective for the incentive effect test of the compensation policy.Third,the internal control quality,the internal governance influence factor,is embedded in the discussion to enable research.The problem is more comprehensive.