Controlling Shareholders' Equity Pledge,Equity Balance And Senior Managers' Reduction

In recent years,equity pledge has become a popular financing tool,and the scale of financing through equity pledge is also increasing.Equity pledge is considered to be the personal behavior of shareholders,and shareholder's equity pledge will not adversely affect the listed company.With the in-depth study of equity pledge,it is found that the equity pledge of the controlling shareholder will still have a negative impact on listed companies.If the equity of the controlling shareholder cannot be returned as agreed after the pledge or if the stock price falls to the warning line and the pledge cannot be added,the creditor has the right to sell the shares of the controlling shareholder.Selling more pledged shares will cause the controlling shareholder to lose control of the listed company.This paper studies the impact of controlling shareholder equity pledge on executives' shareholding reduction.First,it reviews the existing literature from the perspective of executive shareholding pledges and shareholding pledges.Then,combined with the principal-agent theory,information asymmetry theory,insider trading theory and control income theory,etc.,from the theoretical point of view to explore the impact of controlling shareholder equity pledge behavior on executives to reduce holdings,and then put forward the research hypothesis of this article.Finally,this article selects A-share listed companies from 2011 to 2018 as a sample,and examines the impact of controlling shareholder's equity pledge behavior on executives' shareholding reduction through empirical research.Our research found that: the shareholder's equity pledge is positively correlated with executives' shareholding reduction.The higher the shareholder's equity pledge ratio,the greater the extent of executives' shareholding reduction.Further research shows that compared with companies with equity checks and balances,the relationship between the pledge of the controlling shareholder's equity and executives' shareholding reduction is more significant in companies that do not.Institutional investors can suppress the promotion of controlling shareholders' equity pledges to reduce executives' holdings,and the higher the proportion of institutional investors,the stronger the inhibition.