Executive Compensation Stickiness,Dual Innovation And Earning Persistence

At present,with China’s rapid development of economy,in order to seize the initiative and voice in the fierce market competition,enterprises pay more and more attention to the sustainable profitability of enterprises,that is,whether the current profitability can continue to the next year,rather than short-term interests.To improve the future profitability of enterprises,it is difficult to support it by the existing technology and projects alone,and we need to make scale expansion investment or improve the products and services.Innovation is an important means to solve this problem,including dual innovation and utilization innovation,and the level of resource investment in these aspects partly depends on the decisions of managers.Therefore,companies need to focus on the incentives for senior executives to encourage them to invest proactively.In the past,the short-term compensation of senior executives was often linked to performance,and had similar changes,with a high sensitivity to salary performance.However,through data review and data analysis,this thesis found that in recent years,more and more enterprises in the design of executive compensation programs,the range of salary changes and performance changes are not the same.When the performance of enterprises rises,the increase of executive salary will be significantly higher than the reduction of executive compensation when the enterprise performance declines,that is,the executive salary is sticky,forming a management mode of "heavy reward and light punishment".Some companies may even increase executive pay year down when profits fall year-on-year.So will this failure tolerance mechanism become a mediator of senior executives,making senior executives enhance their willingness to invest in innovative activities with high uncertainty,and thus improving the sustainable profitability of enterprises?This thesis is based on the principal and agent theory,optimal contract theory,human capital theory and innovation theory.The A-share listed companies from 2016 to 2019 were selected as the research objects,Empirical analysis was performed,The following conclusions are drawn:(1)The stickiness of executive compensation can promote the sustainable profitability of the enterprise;(2)Both exploratory innovation and utilization innovation can help enterprises to improve their sustainable profitability;(3)The viscosity of executive compensation promotes the dual innovation of enterprises;(4)In the process of the impact of executive compensation stickiness on the continuous profitability of enterprises,dual innovation plays a role.And the utilization of the type of innovation has a better intermediary effect than the exploratory type of innovation.For the empirical results,the thesis presents relevant suggestions,including enterprise and government level.Enterprises need to pay attention to the design of compensation scheme and the optimization of dual innovation structure;while the government needs to provide supporting policy support to guide the innovation activities of the whole society and promote the orderly development of the market.