An Empirical On Executive Compensation,Large Shareholders And Zombie Enterprise

From 2015 to 2016, with the financial supervision mechanism is more strict, Many companies face delisting risk. This kind of enterprise as news reports called "zombie enterprises". Zombie enterprise refers to the government or the bank due to get support from collapse not normal daily operation of the enterprise. In previous studies, many scholars through the corporate performance to analyze the status of the company, to the company to determine whether to enter the financial distress and is on the verge of bankruptcy, the financial distress and bankruptcy of enterprises and the concept of zombies is similar. Zombie companies unable to normal operation, the lack of vitality in the capital market. At the same time, the enterprise after experiencing a rapid growth, facing a transition period, many enterprises insurmountable transition gap that operate without fruit, linger; however the delisting system in China’s capital market and there are many defects, resulting in listed companies are relatively scarce resource, nourish the zombie enterprises.Through the combing of the previous literature, the paper finds that executive compensation and large shareholders will impact on corporate operating performance, and business performance a direct response to the operation of the enterprise, whether to enter the financial distress or bankruptcy of the state; that executive compensation and large shareholders are and corporate zombies have certain correlation.This paper selects the CSMAR database from 2004 to 2014 in Shanghai and Shenzhen Stock Exchange listing Corporation as the research object, studies the relationship between executive compensation and corporate shareholders and the zombie. Through and on the summary of literatures, this paper draws the following conclusion: First, the executive compensation has a negative influence on corporate zombies. With the increase of the compensation of executives, active operating companies more intense, so the company’s operating performance is better, reduces the possibility of zombies. Second, large shareholders to reduce the possibility of enhancing corporate zombies. The interests of major shareholders is determined by the operating conditions of the company as a whole, also increased the proportion of large shareholders, shareholder rights and interests driven by major shareholders of the company more effective governance and oversight, thereby reducing the possibility of zombie companies. Third, executive compensation and shareholders have a negative impact on the common corporate zombie possibility. The proportion of large shareholders continues to rise at the same time, the major shareholders of the company are hollowed out the greater the incentive. Major shareholders will by giving high executive compensation to encourage executives to assist them to empty company, eventually leading to the company’s zombies.The first chapter is the introduction, which mainly introduces the background of this paper, the significance of the topic, research methods and the problems to be solved. The second chapter is literature review, combing the previous literature on the relationship between executive pay, large shareholders and corporate zombies. The third chapter is the theoretical analysis and hypothesis. The fourth chapter is the research design. It mainly introduces the source of the data, the definition of variables and the setting of the model. The fifth chapter is the empirical results and analysis. The last chapter is the final conclusion of this paper.