Study On The Relationship Between Executive Compensation Incentive And Cost Stickiness

Under the new normal of the economy,the consequences caused by the imperfect market economy system and the inappropriate allocation of resources aggravate the operating burden of Chinese enterprises in many aspects.And the high cost makes the environment faced by enterprises increasingly difficult,especially for the manufacturing industry.Cost control is the core and key of the financial management of manufacturing companies.However,at present,the cost control of manufacturing enterprises is still not ideal.Only when enterprises adapt to the new development environment,strengthen cost control and improve the level of cost management,can they achieve real cost reduction.Traditional theory of cost hold that cost and volume is symmetrical relationship changes.But most domestic and overseas scholars have pointed out that the cost of enterprise relationship with volume is not a simple linear change.Cost is affected by the change direction of business volume.The increase or decrease of cost is asymmetric.This asymmetry is called cost stickiness.This paper analyzes the relationship between executive compensation incentive and cost stickiness under different corporate governance environment.This paper is divided into six chapters.The first is introduction.In this part,the author introduces background and significance.The second chapter is the related concepts and theories.In this chapter,the relevant concepts and theoretical supports of executive compensation incentive,corporate governance and cost stickiness are given.The third chapter is about relevant theories and assumptions.In this chapter,the author analyzes relevant theories based on the current situation of cost stickiness of listed companies in China.And the author discusses the effect of executive compensation incentive on cost stickiness under different corporate governance.The fourth chapter is sample selection and model design.This chapter elaborates the data needed to prove the conclusion and the established regression model.The fifth chapter is empirical analysis.In this chapter,data from 2013 to 2017 are selected for empirical analysis.Chapter six is the research conclusion and prospect.At last the conclusions of this paper are as follows : cost stickiness is a common phenomenon in listed manufacturing companies.That is the asymmetry between cost change and income change.The level of executive compensation incentive is negatively correlated with cost stickiness.That is,the improvement of the level ofexecutive compensation incentive is helpful to mitigate the degree of cost stickiness of the enterprise.Good corporate governance strengthens the negative correlation between executive compensation incentive and cost stickiness.Combined with the results of empirical analysis,this paper proposes policy suggestions to reduce cost stickiness from the three aspects of salary incentive system,corporate supervision mechanism and manager market,so as to improve the level of enterprise cost management.The innovation of this paper is mainly reflected in the innovation of research perspective and research content.From the research perspective,at present,our study of cost stickiness mostly concentrated in the test for the presence of cost stickiness,causes and influence factors in the research.There are relatively few articles focusing on the impact of executive compensation incentive on cost stickiness.This paper choose executive compensation incentive as the research angle of view and has certain innovation.From the point of the research content,this article will put cost stickiness,corporate governance and executive compensation incentive on a system to research,and explore the effect of executive compensation incentive and cost of viscous in different corporate governance situation.Finally this paper put forward the countermeasure and the suggestion,and reduce the cost of viscosity on the research content.So this paper have certain innovation.