Short Selling And Executive Compensation Contracts

This paper is based on the introduction of margin trading in China.Using the data of Shanghai and shenzhen a-share listed companies from 2007 to 2016,the paper builds the model and empirically tests the impact of the implementation of short selling trading on the compensation contract of the company's management.It also discusses the influence of different supervisory mechanism and management rights on their relationship.Through the research,the paper finds that the implementation of short selling has improved the Performance-Pay sensitivity of the management of the target company.In the weak supervision mechanism of listed companies,short shelling can significantly improve the company's management pay-performance sensitivity,with strong supervision mechanism of listed companies,short selling can't play a role of the governance.Further from management right size consideration,we found that in the higher management rights of listed companies,shorting selling can significantly improve its management pay-performance sensitivity,and in lower management rights companies,short selling has no significant influence on management compensation contracts.Innovation point of this paper is to study from the perspective of management compensation contract effect of short selling,short selling system improves the target company's management pay-performance sensitivity,it enriches the existing literature At the same time,this paper studies the comprehensive company supervision mechanism,and the management rights on impact of the relationship between executive compensation incentive contracts and short selling,this will help us better understand the impact of short selling on the company,and our study also help related department to deepen financial reform,improve the system of securities issues such as problems for reference.