| Summary: | 碩士 === 中國文化大學 === 會計學系 === 106 === This study examines the impact of top management team (TMT) excess compensation on employee excess pay as well as whether divergence between voting rights and cash flow rights and employee productivity affect the above relationship. Our findings indicate that TMT excess compensation, divergence between voting rights and cash-flow rights, and employee excess productivity all have significantly positive effects on employee pay. Specifically, employees are better paid in cases where top managers receive higher rewards, employees are more productive and firms having larger divergence between voting rights and cash-flow rights. In addition, the interaction variable of TMT excess compensation with divergence between voting rights and cash-flow rights is positively related to employee excess pay, indicating that a closer link occurs between TMT compensation and employee pay in cases where firms experience larger divergence between control rights and cash-flow rights. Such a result is in line with the managerial entrenchment argument that managers may tend to use compensation as a tool to secure their power in their work place when they only hold little equity. The interaction variable of TMT excess compensation with employee productivity is positively associated with employee excess pay, showing the link is closer between TMT compensation and employee pay. Such a result may imply that pay fairness is better in firms having higher productivity.
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