Pay Gap And Corporate Risk-Taking

Corporate risk-taking has an important impact on the sustainable development of enterprises.The sustainable development of enterprises has an important contribution to the long-term sustainable growth of a country's economy.The management rights of the enterprise are separated from the ownership with the improved economic efficiency.This separation leads to the inconsistency between the interests of the agents and the shareholders.In the case of conflicts of interest,agents often over-avoid risks for personal gain and the act will harm the company's interests.It is a common practice to alleviate the unwillingness of agents to take risks through salary incentives.Enterprises often set up different levels of compensation to motivate agents,that is,managers and employees to take risk.The problem is that the pay gap is becoming more and more significant.The widening salary gap has caused some people's doubts and widespread concern of the society.Whether the setting of this salary gap can really play a stimulating role and improve the level of corporate risk-taking is an important issue in the current practical and theoretical circles.Based on the principal-agent theory and the tournament theory,this paper first analyzes the conflict of interest between the owner and the agent from the perspective of principalagent,and points out the problem that the agent tends to avoid taking risk and damage the owner's interest.From the perspective of incentives,the mechanism that the salary gap can stimulate the managers and employees is analyzed.It shows that the increase of the salary gap can promote the managers and employees to actively take risk,and alleviate the conflict of interest between the owners and agents.On the basis of this analysis,this paper studies the impact of the salary gap of China's A-share listed companies on the risk-taking of enterprises,and considers that there are significant differences in the pay gaps between enterprises with different property rights.There are significant differences in the corporate governance of companies with different large shareholders' shareholding ratios.There are big differences in the risks of companies with different growth.These characteristics may affect the relationship between salary gap and corporate risk-taking.Therefore,the impacts of ownership property,shareholding ratio of large shareholders,and business growth on the relationship between them are further analyzed.Finally,through the empirical test,the corresponding conclusions are obtained,which provides empirical experience for improving the risk-taking level of Chinese enterprises,and proposes corresponding suggestions based on the research conclusions.The research findings in this paper are as follows: First,there is a positive correlation between the pay gap and corporate risk-taking.Second,compared with state-owned enterprises,in the private enterprises,the incentive effect of the pay gap on corporate risktaking is more prominent.Third,compared with the enterprises with large shareholding ratio of large shareholders,in the enterprises with low shareholding ratio of large shareholders,the incentive effect of the pay gap on corporate risk-taking is more prominent.Fourth,compared with high-growth enterprises,in the low-growth enterprises,the incentive effect of the pay gap on corporate risk-taking is more prominent.The innovations of this paper are as follows: Firstly,this paper explores the influencing factors of corporate risk-taking from the perspective of salary gap between managers and employees,and comprehensively considers the effect of executives' and employees' salary incentives.Secondly,based on the analysis of the impact of the pay gap on the risk-taking of enterprises,this paper explores the differences between the state-owned enterprises and private enterprises.Thirdly,the paper also considers the influence of the shareholding ratio of large shareholders and the growth of the firm on the relationship between them.The paper studies the impact of the pay gap on the risk-taking of the enterprise under different enterprise characteristics,expanding and deepening the research theme.