| In the past three years,the COVID-19 has spread all over the world,which has caused a maj or impact on China’s economic development.Some enterprises have difficulties in operation due to the impact of the COVID-19 epidemic,and caused financial distress.In addition,phenomena such as "skyrocketing salaries’ and "inverted salaries" among executives frequently occur,leading to problems such as large salary gaps among executives.This seriously violates the effectiveness of compensation contracts and further increases the costs of financially distressed enterprises.This phenomenon has attracted widespread attention from all sectors of society.Therefore,developing effective executive compensation strategies is crucial for the healthy development of enterprises.As the decision-maker of executive compensation,the board of directors directly determines the formulation of executive compensation strategies such as executive compensation level,executive compensation structure,and executive compensation flexibility.With the improvement of women’s status,the participation of female directors in the board of directors is gradually increasing.Due to their vastly different decision-making preferences and personality traits from men,the heterogeneous decision-making style of female directors has attracted increasing attention from scholars both domestically and internationally.Therefore,this article introduces the situational variable of female directors,starting from their characteristics of risk aversion,diligent supervision,and stronger motivation to benefit enterprises,to study the impact of female directors on executive compensation strategies in financially distressed enterprises.Based on the above background,this paper takes 25,594 annual unbalanced panel data of 3,769 A-share listed companies in Shanghai and Shenzhen from 2010 to 2020 as initial samples,and identifies 12,099 samples of financial distress after screening.Based on the Principal-agent Theory,Managerial Power Theory and Championship Theory,this paper analyzes the influence of female directors on executive compensation strategies in financial distress enterprises.The main work includes comparing and screening the identification of financially distressed firms,exploring the effect of female directors on executive compensation level,executive compensation structure,and executive compensation elasticity,and conducting ordinary least squares regression analysis with SPSS26.0 and STATA16.0 as data analysis tools,robustness tests such as replacement variables,supplementary control variables,and propensity-based matching score method,endogeneity tests considering time lag effects,residual term estimation,and other methods,the following important conclusions were drawn:(1)In financially distressed firms,female directors tend to suppress the level of executive compensation,but in order to prevent the problems such as insufficient incentive caused by the decline of executive compensation,female directors promote the level of executive equity compensation for the sake of the enterprise.(2)Female directors tend to reduce the executive-employee pay gap in financially distressed firms,while the effect on pay within the executive team is unstable.(3)In financially distressed firms,female directors tend to reduce the performance sensitivity of executive compensation.In order to improve corporate reputation and gain the support of stakeholders,female directors with the motivation of benefiting the enterprise are more inclined to promote the correlation between executive compensation,corporate environmental responsibility and charitable donation.(4)In non-financially distressed firms,female directors don’t have a significant effect on the pay gap within the executive team and the executive-employee pay gap.(5)The higher the level of executive compensation,the less conducive it is to get out of financial distress and the more likely it is to make the firm fall into financial distress.Female directors have a significant weakening effect on the positive relationship between executive compensation level and corporate distress;the larger the pay gap within the executive team,the more likely it is to make the company fall into financial distress or get out of distress,and female directors have a weakening effect on the positive relationship between pay gap within the executive team and corporate distress.(6)In financially distressed enterprises,CEO party membership has a inhibitory effect on executive compensation levels,which can narrow the internal compensation gap within the executive team and the compensation gap between executives and employees,and reduce the sensitivity of executive compensation performance.In conclusion,focusing on financially distressed firms,this paper systematically explores the effects of female directors on executive compensation levels,executive compensation structures,and executive compensation flexibility,and empirically tests the effects of female directors on executive compensation levels,executive compensation structures,and executive compensation flexibility.Also in the extended study,the effects of female directors in different positions on executive compensation strategies in financially distressed firms,the effects of female directors on executive compensation strategies in non-financially distressed firms,the effects of compensation strategies adopted by female directors on firms getting out of distress and getting into distress,the moderating effects of CEO party membership in financially distressed firms on female directors and executive compensation strategies,and the effects of female directors in different positions on executive compensation are explored.The article refines the existing research,and the findings help deepen the knowledge of the effects of female directors’ participation in corporate governance from the perspective of compensation governance,especially providing practical guidance for addressing the corporate governance challenges brought by financial distress. |
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