<p>This study examines how boards determine manager–worker pay ratios by integrating ability‑based and power‑based perspectives within a role‑congruence framework. Drawing on role theory and complementarities, we argue that wider pay gaps are more defensible when managerial competence aligns with formal authority because coherent role expectations strengthen accountability under stakeholder scrutiny. Conversely, misalignment—whether competence exceeds discretion or discretion exceeds competence—undermines defensibility, heightens reputational risk, and leads boards to compress pay ratios. Using polynomial regression and response surface analysis on 12,010 firm‑year observations from Taiwanese companies (2012–2023), we find that, holding combined ability–power endowment constant, alignment is associated with larger pay ratios, whereas divergence produces compression. Under congruence, ratios rise as both attributes increase; for equivalent endowment, ratios are higher when authority exceeds competence than the reverse. The congruence‑based component of pay ratios also predicts higher subsequent firm performance after accounting for prior baselines. These patterns reflect deliberate board‑level distributive choices rather than mechanical consequences of pay levels. Subsample analyses further show that non‑family firms apply stricter congruence requirements and exhibit stronger performance sensitivity. Overall, the findings indicate that internal wage structures are shaped by the role coherence between competence and authority, offering boards theory‑grounded guidance for calibrating incentives while maintaining stakeholder acceptance.</p>