With the state-owned listed companies as research samples and the amount of patent application as an index to measure enterprise innovation,this paper examines the effect of pay gap between executives and employees on the innovation of state-owned enterprises and whether the government’s office experience of executives affects the relationship between pay gap and enterprise innovation..The test results show that the internal pay gap is conducive to carrying out a significant number of innovative activities for relatively reasonable enterprises, which reflects that a reasonable salary gap can promote enterprise innovation. But the innovation effect of the pay gap is significantly smaller in state-owned enterprises in which executives have government service experience. Further tests show that the managerial power doesn’t weaken the incentive effect of pay gap on innovation of state-owned enterprise, which shows that the pay gap has an important incentive effect on management.However, the incentives of potential administrative promotion faced by the management with government service experience have weakened the incentive effect of the pay gap, thus providing important empirical evidence for the classification management of executive compensation contract.