Study On Executive Compensation Stickiness

The separation of ownership and management leads to the interests conflictsbetween shareholder and executive. Well-designed executive compensation contractsaims to deal with the principal-agent problem. However, we focus on executivecompensation because it is so much. It shows us that the decline of the performance inmany listed companies does not lead to the same degree decline of executivecompensation, and This phenomenon is called Compensation Stickness. Does sensitivityexist beween executive compensation and corporate performance? Is executivecompensation sticky? Does time and ownership concentration influence executivecompensation stickness?Based on data of manufacturing listed companies, We use multiple regressionmethod to examine the sensitivity between executive compensation and corporateperformance of China’s listed companies, executive compensation stickness, theinfluence of the time factor and the ownership concentration factor on executivecompensation stickness. Empirical evidence shows that there exists significant sensitivitybetween executive compensation and corporate performance.It also tells us that thereexists executive compensation stickness and it is influenced by the time factor and theownership concentration factor. According to the results of the empirical research, wesums up the conclusion and the future research direction, and put forward thecorresponding policy recommendations.