| dc.description.abstract | Companies are willing to pay good compensation to managers not only because they have the responsibility of leading and managing the company, but also for avoiding agency problem and hoping that higher pay will lead managers to create more value and growth for the company. Manager’s compensation, to some extent, symbolizes its value, achievement and status. Thus, when managers get overpay, it will encourage and motivate them to work harder, thereby help improve company’s performance. But, if they are not satisfied with the pay, negative feelings will cause managers to leave, resulting in a negative impact on company performance. In order to determine whether managers are overpaid or not, and discuss the impact of overpay on company’s performance and manager’s movement, this study intends to derive Executive manager′s market pay through estimation.
The result shows that only when managers get overpaid will the pay have positive effect on company’s future performance, and also have a significant negative effect on manager’s movement. Moreover, manager’s movement will have negative impact on company’s performance only in companies which has low performance, but is not significant in companies which has high performance. Meanwhile, manager’s movement doesn’t have mediating effect on the relationship between overpay and company performance. In summary, this study provides different perspective in interpreting the effect of overpay to company performance. The effect may be strengthened or weakened due to other factors and interactions within the organization or manager’s personal reasons and so on. Thus, the effects should be decided on a case by case basis. | en_US |