Executive Compensation,Corporate Governance And Cost Stickiness

Cost management is the lifeline project of the company's development,and it has very important significance for the study of cost behavior.The traditional cost behavior theory usually expresses the relationship between cost and business volume in the form of y=a+bx,and considers that the cost and volume of the business are linear.However,in real life,we find that the cost and the volume of business do not change in the same proportion.The cost changes in the amount of business volume increase and decrease are different,and there is a"cost stickiness",also called "cost stickiness".The cost stickiness is a challenge to the traditional cost behavior theory.As China's current market economy system is still not perfect and the effective market is not sufficient,the level of corporate governance is generally not high,resulting in the prominent phenomenon of corporate cost stickiness in China.Executive compensation incentives can mitigate agency problems to a certain extent and effectively reduce cost stickiness.The paper adopts a combination of normative research and empirical research to study the effect of executive compensation incentives on cost stickiness.After reviewing and combing the literature on the existence and characteristics of cost stickiness and influencing factors,the dissertation studies the relieving effects of executive compensation on cost stickiness based on principal-agent theory,contract theory,opportunism,and incentive theory.At the same time,corporate governance indicators were introduced to explore the role of corporate governance in regulating the roles of the two.The paper takes the 2010-2016 China's Shanghai and Shenzhen A-stock listed companies as the research object,selects the growth rate of sales expenses and the growth rate of administrative expenses as the explanatory variables,and selects the operating income growth rate,executive compensation level and dummy variable as Explain the variables,select capital intensity and debt level as control variables,use the principal component analysis method to synthesize the corporate governance comprehensive index,use statistical analysis software SPSS 19.0 to conduct empirical research on the sample data,and finally obtain a total of 6986 research samples,state-owned samples.There are 2,572 non-state-owned samples,4402,according to the ranking of the corporate governance indicators,a total of 2,325 samples representing a high level of corporate governance are obtained,and 2,323 samples representing a low level of corporate governance are obtained.The empirical results of the thesis show that:(1)There is a sticky phenomenon between sales expenses and management fees of listed companies in the manufacturing industry in China,and the management cost is more sticky;(2)The executive compensation level is significantly negatively related to the stickiness level of sales expenses,and the executive compensation The level is negatively related to the management cost stickiness level but not significant;(3)The higher the corporate governance level,the stronger the incentive effect of executive compensation.Based on the empirical results and combined with the actual situation of China's manufacturing listed companies,the paper proposes four suggestions:First,improve the corporate governance mechanism;second,optimize the executive compensation system;third,strengthen the training of management personnel;fourth,improve the market mechanism.The paper provides empirical data and countermeasures for China's manufacturing listed companies to reduce cost stickiness.It has certain positive significance for improving corporate governance of listed companies in China's manufacturing industry,strengthening cost management,and enhancing market competitiveness.