Research On The Impact Of Pay Dispersion Among Non-CEO Executives On Corporate Risk Taking

As the core of the enterprise,the senior management team should design fair and effective compensation contracts to implement effective incentives for senior managers and improve the overall effort level of the senior management team,which will help the enterprise to achieve its goals continuously and achieve more long-term development.The existing literature on the characteristics of the compensation contract of the senior management team mainly focuses on the vertical compensation gap within the senior management team,that is,the compensation gap between the CEO and other executives is investigated,focusing on the important role of the CEO in team motivation.There is little literature to discuss the incentive effect of the horizontal salary difference between non CEO executives.In fact,in the enterprise,non CEO executives are basically at the same level,their abilities,powers and positions are closer,and they are more comparable with each other.In addition,the non CEO executive team as a whole also has strong cooperation needs when participating in or implementing decisions,so non CEO executives are more motivated to pay attention to the fairness and rationality of the overall salary structure.Non CEO executives are an important component of the senior management talent team and generally have a large number of people.Therefore,effective incentives for non CEO executives to enhance their work enthusiasm are of great significance to improve the overall efficiency of the senior management team.In an enterprise,it is generally the chairman,CEO and other management who master the final decision-making power,but their understanding of the specific decision-making content and implementation effect may not be deep.non CEO executives,as the main body of the formulation and implementation of the specific content of the decision-making plan,may have a better understanding of the specific details of the decision-making plan,and better grasp the key links in the daily business activities of the enterprise.Therefore,as the backbone of the senior management team,in the process of decision-making and implementation,non CEO executives can have an important impact on the decision-making behavior and specific implementation effect of the enterprise.The effectiveness of non CEO executive compensation incentive is an important factor affecting their work efficiency and enthusiasm.Therefore,this paper selects China’s A-share listed companies from 2008 to 2020 as the sample range to examine whether differentiated remuneration among non-CEO executives can bring positive governance effects to enterprises.The study found that differentiated compensation arrangements among non-CEO executives can promote the level of corporate risk-taking,and the results are still robust after a series of tests.In further research,this paper finds through mechanism testing that the differentiated compensation of non-CEO executives promotes the improvement of corporate risk-taking by influencing the degree of corporate strategic differentiation.In the heterogeneity analysis,this paper finds that the role of differentiated compensation of non-CEO executives on the level of corporate risk-taking is more prominent in non-state-owned enterprises,smaller enterprises and enterprises with low growth potential.In the moderating effect analysis,this paper finds that the vertical pay gap with CEOs can strengthen the incentive effect of differentiated compensation among non-CEO executives,while external fairness of compensation inhibits the improvement of differentiated remuneration of non-CEO executives on the risk taking level of enterprises.The possible contributions of this paper are as follows: First,it provides some empirical evidence that differential compensation for non CEO executives can bring positive governance effects to enterprises.Secondly,it enriches the relevant literature in the field of enterprise risk bearing.This paper finds that differential compensation among non CEO executives is an effective governance means to enhance the willingness of management to take risks.Third,the findings of this study provide some inspiration and reference for Chinese enterprises to design a reasonable and effective executive compensation structure and better achieve long-term development.