Excess Vertical Pay Dispersion，Equity Incentives and Firm Performance
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| Title | Excess Vertical Pay Dispersion，Equity Incentives and Firm Performance
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| Author | Zhao Xiaoju , Mei Chun and Wang Zhen |
| Organization | School of Finance, Shanghai University of Finance and Economics |
| Email | xjzhao@mail.shufe.edu.cn；meichunshufe@163.com；wang.zhen@mail.shufe.edu.cn |
| Key Words | Vertical Pay Dispersion；Equity Incentives；Firm Performance |
| Abstract | Based on tournament theory and equity theory, this paper analyses the effect of excess vertical pay dispersion on the executive’s behavior and firm performance, and empirically examines the relationship of excess vertical pay dispersion and firm performance by using the data of china’s listing firms. Empirical research, combining the ownership property and the status of implementation of equity incentives of listing firms, is followed. The result shows that excess vertical pay dispersion has a significant negative effect on the performance of state-owned firms, and has no significant effect on the performance of non-state-owned firms. The implementation of equity incentives can significantly reduce the negative effect of excess vertical pay dispersion on the performance of state-owned firms, and significantly increase the positive effect of excess vertical pay dispersion on the performance of non-state-owned firms. This paper extends the extant literature of relationship between pay dispersion and firm performance, and has a certain significance and reference value to the management of listing firm and state-owned firm’s regulator. |
| Serial Number | WP830 |
| Time | 2015-03-04 |
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