Executive Compensation Stickiness,Equity Balance And Enterprise Innovation Investment

With the development of a new round of global scientific and technological revolution and the accelerated transformation of economic development mode,innovation has become the current trend of social development.Innovation can not only help enterprises to improve their own production and management conditions,occupy a favorable position in the market,but also help enterprises to achieve long-term development in a complex environment.Therefore,innovation has been widely concerned by scholars.As the decision maker of enterprise strategic action and innovation investment,executive personnel is the important power to decide innovation.Enterprises can set up an effective salary incentive mechanism to mobilize the initiative of senior executives.Executive compensation stickiness,as an intentional arrangement in the design of compensation system,makes it possible for senior executives to get more reward when the performance rises,and avoids punishment when the performance drops.This stimulates the risk-taking spirit of senior executives to a certain extent,and may affect the innovation behavior of enterprises.As a new governance mechanism,equity checks and balances have a direct impact on the principal-agent relationship between senior executives and shareholders,and thus have an impact on the design of compensation system and the formulation of innovative decision-making.On the basis of principal-agent theory,compensation contract theory and enterprise innovation theory,this paper selects Shanghai-Shenzhen A-share listed companies which disclosed R & D expenses in 2014-2017 as samples,and constructs a model to study the relationship executive compensation stickiness,equity balance and enterprise innovation investment.The conclusions are as follows:(1)the viscosity of executive compensation in listed companies is universal;(2)the stickiness of executive compensation promotes innovation investment of enterprises significantly,and the relationship between them is more significant in state-owned enterprises;(3)Equity checks and balances play a negative role between executive compensation stickiness and enterprise innovation investment.This show that executive compensation stickiness as a the design of compensation system with heavy award and light penalty can encourage innovation effectively by tolerating the failure behavior in the early stage of executive innovation.The improvement of equity balance is beneficial to the formation of an effective regulatory mechanism,which may,to a certain extent,restrainthe stickiness of executive compensation and thus reduce the investment in innovation of enterprises.This paper not only enriches the research on executive compensation system,but also expands the scope of empirical research on enterprise innovation by studying the influence of executive pay viscosity on enterprise innovation input.At the same time,it provides a theoretical basis for how to design the executive compensation mechanism and increase the investment in enterprise innovation.In addition,further consideration is given to the corporate governance mechanism,that is,the influence of equity balance system.It provides support for how to improve the corporate governance mechanism and improve the investment level of enterprise innovation.