Compensation Control and Human Capital Upgrading: An Empirical Study Based on Pay Restriction Policies

Abstract Book of the 19th International Conference on Modern Research in Management, Economics and Accounting

Year: 2026

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Compensation Control and Human Capital Upgrading: An Empirical Study Based on Pay Restriction Policies

Dr. Yunying Fu

ABSTRACT:

In 2014, the “central management enterprise leader compensation system reform plan” was announced. Its core is that the pay level of the central enterprise leader should not exceed 7 – 8 times the average pays of the employees. In 2015, the plan was implemented. Subsequently, the province governments followed up the reform. This paper tries to explores the impact of this reform on the employee structure and corporate performance. The research sample is A-share listed companies from 2012 to 2018. The main research method is PSM-DID method to study the impact of policy shocks. The main conclusions of this paper are as follows: (1) In terms of the compensation structure of the company, the compensation control basically realizes the optimization of the fairness of the compensation structure, reduces the executive compensation, improves the salary of ordinary employees, and limits the pay gap between executives and employees. (2) In terms of the company ‘ s employee structure, compensation control makes the proportion of highly educated employees increase. (3) In terms of corporate performance, there is an inverted U-shaped relationship between corporate performance and pay gap, and pay regulation will weaken the effect of pay gap.

Keywords: A-Share Listed Companies; Corporate Performance; Employee Structure; Pay Gap; PSM-DID Method