This study aims to examine the impact of top managerial power and corporate governance on pay disparity between top managers and non-management employees. Using a sample of firms listed on the Taiwan Stock Exchange from 2014 to 2019, we find that managerial structural power has a positive impact on pay disparity, suggesting that managers having greater control over corporate resources prefer a wider pay gap. On the contrary, managerial expert power has a negative impact on pay disparity, showing that more talented managers prefer a closer pay gap. In addition, corporate governance mechanisms can mitigate the gap.
