TITLE:
Impact of Executive Compensation Incentives on Corporate Tax Avoidance
AUTHORS:
Yishu Wang, Jia Yao
KEYWORDS:
Executive Incentives, Corporate Tax Avoidance, Property Nature
JOURNAL NAME:
Modern Economy,
Vol.12 No.12,
December
20,
2021
ABSTRACT: The separation of enterprise ownership and control
has led to conflicts of interest between its owners and actual managers.
Incentives for executives have become an important means to reduce the
contradiction between the two. Based on the principal-agent theory and
rent-seeking theory, this article selects all listed companies in China from
2013 to 2018 as research samples and divides
them into state-owned holding companies and non-state-owned holding companies, exploring the effect of executive compensation incentives on
corporate tax avoidance behaviors under the nature of different property
rights. The results of the study show that for non-state-owned holding
enterprises, executives’ monetary remuneration, equity incentives and corporate
tax avoidance have a significant positive correlation; for state-owned holding
enterprises, there is no significant relationship between executives’ monetary
remuneration and corporate tax avoidance, and equity incentive is significantly
negatively correlated with corporate tax avoidance.