Xiaohan Zhang’s research while affiliated with Southwest University of Finance & Economics and other places

Executive compensation stickiness is a compensation characteristic that links executive pay to company performance, reflecting a tendency among compensation setters to provide generous rewards to executives and relatively fewer penalties. It can be considered an effective incentive mechanism. This paper empirically examines the impact of executive compensation stickiness on stock price crash risk using data from all A-share listed companies from 2010 to 2021. The empirical results show that executive compensation stickiness significantly mitigates stock price crash risk. Further research reveals that in companies with female CEOs, non-financial backgrounds among top executives, and low information opacity, the inhibitory effect of executive compensation stickiness on stock price crash risk is more pronounced. Mechanism tests suggest that executive compensation stickiness reduces agency costs and, thereby, suppresses stock price crash risk. This study extends the understanding of the economic consequences of executive compensation stickiness and factors influencing stock price crash risk, providing practical insights for designing compensation incentive systems for listed companies and maintaining the stability of capital markets.