Cross-level Effects of Top Management Team Power and Compensation Composition on Top Managers' Turnover

Based on the basic assumptions of organizational hierarchy theory and equity theory, this study used top managers from 2 732 A-share listed companies in Shanghai and Shenzhen stock markets from 2011 to 2016 as a sample and explored the cross-level effects of top management team (TMT) power and compensation composition on top managers' turnover in the next year. The results showed that the influences of TMT power and compensation composition on top managers' turnover were quite different. At the individual level, power dissimilarity between top managers and other TMT members significantly reduced top managers' turnover in the next year, and top managers' power level strengthened the negative relationship between power dissimilarity and top managers' turnover. However, compensation dissimilarity between top managers and other TMT members significantly promoted top managers' turnover in the next year, and top managers' compensation level weakened the positive relationship between compensation dissimilarity and top managers' turnover. At the team level, TMT power inequality significantly reduced top managers' turnover in the next year, whereas TMT compensation inequality significantly promoted top managers' turnover in the next year.