By taking all the A-share listed companies of Shanghai and Shenzhen from 2007 to 2017 as the research samples, this article mainly focuses on the existence, situational factors, and economic consequences of the peer effect of executive compensation. The results show that there exists a peer effect of executive compensation in both the industry and the region. In addition, the above peer effect of compensation is more obvious in companies with high degree of environmental uncertainty and proportion of non-state ownership. Besides, the relationship between the peer effect of executive compensation and enterprise development is different as the time changes. Specifically, while the peer effect can promote the development of enterprises in the short term, it restrains the development of enterprises in the long run. It is further found that imitation is the internal logic to explain the peer effect of compensation. In addition, the peer effect of compensation reduces the pay-performance sensitivity. Not only does this research enrich the content system and existing literature for executive compensation in theory, but also provides a guidance and reference for the formulation of executive compensation plan of listed companies and the application of the externality of peer effect.