Author(s)

Yishu Wang^1,2, Jia Yao¹

¹Business School of Changzhou University, Changzhou, China.
²Business School of Changshu Institute of Technology, Changshu, China.

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.

Executive Incentives, Corporate Tax Avoidance, Property Nature

Wang, Y. and Yao, J. (2021) Impact of Executive Compensation Incentives on Corporate Tax Avoidance. Modern Economy, 12, 1817-1834. doi: 10.4236/me.2021.1212094.