| How to alleviate the agency conflict is the focus of attention of all sectors of society.The optimal contract theory points out that as an observable indicator,enterprise operating performance can reflect the degree of hard work of managers and become the preferred indicator for the construction of salary incentive mechanism.However,in recent years,there have been a lot of salary chaos,such as "sky high salary","zero salary" and the serious inversion between executive salary and company performance,which reflect the derailment between executive salary and enterprise operating performance,These phenomena violate the concept of effective compensation contract,deviate from the original intention of linking executive compensation with enterprise operating performance,and arouse public discussion and attention.Scholars have also begun to study the influencing factors of executive compensation performance sensitivity.After China’s central economic work conference formally proposed deleveraging in 2015,deleveraging has been listed as the focus of China’s economic work for many consecutive years.Enterprise deleveraging has a positive effect on China’s macroeconomy and enterprise operating performance,but it also has negative effects,increasing the risk of stock price collapse,increasing financial assets,and not conducive to enterprise innovation.According to the theory of corporate governance,the supervision mechanism of debt financing is an important part of corporate governance.Enterprise deleveraging is to adjust the capital structure downward,reduce the asset liability ratio and weaken the supervision and governance effect of creditors.Will it have an impact on the corporate agency problem?Therefore,starting from the enterprise deleveraging behavior,this paper studies its impact on the sensitivity of executive compensation performance.It is found that enterprise deleveraging increases the management’s free control of cash flow,creditors lose the incentive of external supervision,and reduce the supervision and restraint of enterprise executives,which provides material conditions and opportunities for Managers’ private interest behavior,intensifies enterprise agency conflict and reduces the sensitivity of executive compensation performance.Firstly,taking China’s 2009-2020 Shanghai and Shenzhen A-share listed non-financial companies as samples,this paper uses guotai’an database to obtain sample data to test the impact of corporate deleveraging on the sensitivity of executive compensation performance.The study found that corporate deleveraging significantly reduced the sensitivity of executive compensation performance.Secondly,the study found that the internal and external governance mechanism of enterprise deleveraging is weak,and the sample group of state-owned enterprises significantly reduces the sensitivity of executive compensation performance.Then,the group test is conducted for different deleveraging methods,and the enterprise deleveraging is divided into debt reduction and power increase.The study finds that the sample group using debt reduction deleveraging significantly reduces the sensitivity of executive compensation performance,and the debt reduction is divided into short debt reduction and long debt reduction.The study finds that the sample group using debt reduction deleveraging significantly reduces the sensitivity of executive compensation performance.After mechanism test,It is confirmed that enterprise deleveraging brings incremental free cash flow and weakens the governance effect of creditors,provides material conditions and opportunities for management to engage in self-interest behavior,intensifies enterprise agency conflict and reduces the sensitivity of executive compensation and performance.Finally,after a series of endogenous and robustness tests of re measurement variables,Heckman two-stage regression and propensity score matching,the empirical results are still robust.Compared with previous literature,this paper enriches the economic consequences of enterprise deleveraging,pays attention to the negative effects of enterprise deleveraging,expands the influencing factors of executive compensation performance sensitivity,that is,enterprise deleveraging reduces executive compensation performance sensitivity,verifies the mechanism of enterprise deleveraging reducing executive compensation performance sensitivity,and puts forward solutions to reduce the negative effects of enterprise deleveraging,This not only provides policy reference for our government to further carry out structural deleveraging,but also provides experience reference for Chinese enterprises to deleverage. |
