Research On The Influence Of Corporate Debt Financing On Executive Compensation Structure

The issue of executive compensation incentive has always been the focus of attention and continuous research in the business and academic circles.In order to find ways to improve the effectiveness of executive compensation incentive,we should first study many factors that affect executive compensation incentive.Among them,the external factors of corporate debt financing can not be ignored.In fact,for the sake of self interest,rational external creditors will take the initiative to pay attention to the establishment of debtor’s mechanism to assess potential risks when making credit decisions.As an important part of corporate governance,the incentive mechanism of executive compensation will also be paid attention to.This research is aimed at the relationship between the debt financing behavior of the listed companies and the executive compensation,and makes a comparative analysis of the two specific property rights of the state-owned listed companies and the non-state-owned listed companies.This paper mainly discusses the specific influence of debt financing cost and debt maturity constraint on executive compensation structure.On the basis of previous research,this article combines the principal theories of principal-agent theory,agency cost theory,and stakeholder theory,and then analyzes the relevant data of listed companies in China’s Shanghai and Shenzhen A shares during 2007-2016,and then draws the following main conclusions:First,overall,corporate debt financing behavior has significant effect the structure of executive compensation.Among them,debt financing cost has a significant negative impact on the proportion of executives’ risk salary,while debt maturity constraint has a significant positive impact on the proportion of executives’ risk salary.Second,compared with the state-owned enterprises,the debt financing cost of non-state-owned enterprises has a more significant negative impact on the proportion of executive risk compensation.Third,the debt maturity constraint of state-owned enterprises has a positive impact on the proportion of executive risk compensation,but not significantly,while the debt maturity constraint of non state owned enterprises has a significant positive impact on the proportion of executive risk compensation.In the process of executive compensation design,we should fully consider and take advantage of the impact of external liabilities on executive compensation structure,and actively play its due governance effect.At the same time,we should pay more attention to speed up thereform of the salary system of the executives of state-owned enterprises and the improvement of the corresponding financial system.In addition,we should consider the effective design of executive compensation structure to help private enterprises get out of the difficult situation of financing.