Research On The Impact Of Executive Compensation Contract On Enterprise Innovation

Corporate innovation has always been a classic research topic in academia and practice.With regard to China where economic development has entered the "new normal," corporate innovation has become a focus of attention for the theoretical community and the public.For listed companies,the most effective way to cultivate the core competitiveness of the company is to strengthen the company's ability to innovate.As the main body of promoting enterprise innovation,executives how to excite senior management's innovation drive is an important issue that modern enterprise system needs to solve.Executive compensation incentives are the main method of executive incentives.However,there have been differences in the study of the relationship between executive compensation incentives and corporate innovation.Therefore,this paper attempts to explore the impact of executive compensation contract on corporate innovation from the two aspects of executive compensation contract quality,namely the sensitivity of salary performance and the stickiness of compensation.After combing the related literature systematically,this paper starts with the principalagent theory,the optimal compensation contract theory,the management power theory,and the innovation theory,and analyzes the influence of the executive compensation contract quality on the company's innovation.Then,using the relevant data of China's A-share listed companies in Shanghai and Shenzhen during 2011-2015 as a research sample,empirical analysis shows that the higher the sensitivity of executive compensation,the higher the level of corporate innovation;the other conditions remain unchanged.Next,the higher the stickiness of executive compensation,the higher the level of corporate innovation;a further discovery that higher levels of executive compensation can increase the degree of influence of executive stickiness on corporate innovation and weaken the sensitivity of executive compensation.The degree of influence of innovation.Finally,on the basis of the above research,we put forward corresponding suggestions for the executive compensation incentives and corporate innovation and development in China,and pointed out the deficiencies of this study.