Impacting mechanism of executive compensation incentive on corporate debt maturity

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Science Research Management ›› 2015, Vol. 36 ›› Issue (8) : 96-103.

Liu Jingjian, Jiao Huaidong, Nan Xiaoli

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Abstract

From the traditional agency theory, debt maturity decision is influenced by the relationships between creditor and shareholder, but whether it includes the information of executive incentive compensation? This paper elucidates the impacting mechanism of executive compensation structure on debt maturity based on creditors' expectation. With the panel data analysis of listed companies that implemented the stock incentive plan from 2008 to 2012, results show that there is a reverse U-shape relationship between executive cash compensation and debt maturity, stock option plan and stake-raising are positive but incentive intensity is opposite, which is consistent with research hypotheses. Last, some advicesis put forward on the executive compensation design, credit rating by creditor, and how to improve information disclosure.

Key words

debt maturity / executive compensation / equity incentive

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Liu Jingjian, Jiao Huaidong, Nan Xiaoli. Impacting mechanism of executive compensation incentive on corporate debt maturity[J]. Science Research Management. 2015, 36(8): 96-103

References

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