Proceedings of the 8th International Conference on Research in Management and Economics
Year: 2023
DOI:
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The Impact of the Employee Stock Ownership Plan on the Executive Compensation Sensitivity and Stickiness of Chinese-Listed Companies
Kesen Jin, Bingxin Cai
ABSTRACT:
This study uses all A-share listed companies from 2015 to 2022 as a research sample to scrutinize the impact of employee stock ownership plans on company executive compensation based on the perspectives of compensation-performance sensitivity and stickiness. The findings reveal a significant augmentation of executive compensation-performance sensitivity and stickiness in Chinese companies with employee stock ownership plans, attributing this effect to the growth impact on company performance; Additionally, company size, as measured by the number of employees, is identified as a contributing factor in heightening executive compensation sensitivity and stickiness; The increase in ownership concentration within listed companies with employee stock ownership plans is associated with an amplified executive compensation sensitivity, while demonstrating no significant impact on executive compensation stickiness. However, the expansion of board size does not exert a significant influence on executive compensation. This study examines employee stock ownership plans’ impact on internal compensation distribution within the company and helps improve corporate governance.
keywords: Board Size, Company Performance, Company Size, ESOP, Ownership Concentration