Research On The Influence Of Executive Incentive On Cost Stickiness

Cost is an important factor for the survival and development of an enterprise.According to cost behavior theory,there is a linear and symmetrical relationship between cost change and business volume change.However,some scholars have found that with the change of business volume,the increase speed of cost is greater than the decrease speed of cost,that is,the non-linear relationship between cost change and business volume change,and the phenomenon of "cost stickiness" exists in enterprises.The proposal of cost stickiness has aroused intense discussion in academic circles.Among them,the cause of cost stickiness is paid more attention to.At present,the mainstream view is that the principal-agent problem is the cause of cost stickiness,and the implementation of incentives for senior executives can alleviate agency conflicts,thus affecting the cost stickiness.Therefore,this paper studies the influence of executive incentive on cost stickiness,which can not only help executives to effectively manage costs and increase enterprise value,but also provide references for enterprises to formulate incentive plans.Under the guidance of principal-agent theory,economic man hypothesis and incentive theory,this paper proposes the research hypothesis,selects the financial data of 426 a-share listed companies in Shanghai and Shenzhen stock exchanges of high-tech industry from 2013 to 2017 as samples,and studies the correlation between executive incentive and cost stickiness from two aspects of compensation incentive and equity incentive.Based on the executive compensation reform of state-owned enterprises implemented in January 2015,this paper studies the changes of executive incentive effect before and after the "salary limit order",and compares the differences between state-owned enterprises and non-state-owned enterprises.By using Stata software for empirical analysis,the following conclusions are drawn:the cost of China's listed companies is sticky,and the stickiness of the cost is more prominent in non-state-owned enterprises;There is a negative correlation between executive compensation incentive and cost stickiness in China's listed companies;Affected by the "salary restriction order",the executive compensation incentive level drops,and the performance is more outstanding in the state-owned enterprises;There is a negative correlation between equity incentive and cost stickiness in China's listed companies,which is more obvious in non-state-owned enterprises.In view of the research conclusions,this paper puts forward policy Suggestions,and analyzes the research deficiencies and prospects for the follow-up research.