Study On Executive Compensation Stickiness And M&A Behavior Of Listed Companies

M & A is an important investment behavior that companies try to realize capital concentration and rapid expansion through the transfer of rights according to the property right system.In recent years,large-scale M & A transactions occur frequently in China's capital market.And management layer,as a key decision-maker in enterprise management,plays a vital role in the whole process of merger and reorganization.At present,more and more scholars have found that executive compensation has sticky characteristics,executive compensation stickiness as a deliberate arrangement in the design of compensation system,so that executives get more reward when the performance of the enterprise rises,and the performance decline is exempted from the corresponding punishment.This to some extent stimulates the executive's adventurous spirit,which may have an impact on the M & A behavior of enterprises.Therefore,this paper attempts to study the relationship between salary stickiness and M & A behavior.Based on principal-agent theory,compensation contract theory,executive right theory and efficiency theory,this paper selects A listed companies that disclose M & A transaction data between Shanghai and Shenzhen from 2014 to 2018 as a sample,uses the top three executives' total compensation and operating net profit data to quantify the compensation stickiness,through the construction of multiple regression model to study its relationship with M & A scale and M & A performance,and according to the nature of the enterprise to distinguish between state-owned enterprises and private enterprises,in order to analyze the differences and similarities of the impact of executive compensation stickiness on M & A behavior of different nature enterprises.The empirical analysis shows that :(1)executive compensation stickiness is common in listed enterprises in China;(2)the higher the executive compensation stickiness level of listed enterprises,the more large-scale M & A transactions will be carried out,and this positive correlation is more significant in non-state-owned enterprises;(3)executive compensation stickiness characteristics of listed companies in China can enhance M & A financial performance and M & A market performance,and both in state-owned enterprises and private enterprises,pay stickiness and M & A performance are significantly positive correlation,indicating that the existence of executive compensation stickiness has some rationality,may be the intentional arrangement of enterprises.Executive compensation stickiness,as a compensation system arrangement that tolerates executive failure,on the one hand will lead to management's intention to expand the scale of mergers and acquisitions for personal gain,which requires the effective supervision of executive rights by the board of directors to restrain the negative impact of compensation stickiness;on the other hand,executive compensation stickiness will reduce the risk of individual mergers and acquisitions,encourage executives to actively engage in mergers and acquisitions,enhance the performance of mergers and acquisitions,and accelerate the development of the company.By studying the influence of executive compensation stickiness on M & A,this paper not only enriches the related research of executive compensation system,but also expands the scope of empirical research on M & A.At the same time,it provides a theoretical basis for how to design executive compensation mechanism and improve M & A performance.