An Empirical Research on the Relationship between TMT’s Pay Gap and Firm Performance
SHI Yong-shuan1， YANG Hong-fen2
(1.Economics and Management School,Wuhan University, Wuhan, Hubei,430072,China; 2.School of Finace and Economics of Xi'an Jiao Tong University, Xi'an 710061,China)
Abstract This paper examines the effect of TMT’s pay gap on firm performance by analzing data of China’s listed firms during 2005-2010. The empirical results show that there is an inverse U shape relationship between TMT’s inside/outside pay gap and firm performance. Specifically, both TMT’s inside and outside pay gap has a positive effect on firm performance before TMT’s inside/outside pay gap reach a cut point. After this cut point, both TMT's inside and outside pay gap has a negative effect on firm performance.
2013, Vol. 1 
