TITLE:
Short Selling and Executive Pay-for-Performance Sensitivity
AUTHORS:
Wanlin Chen
KEYWORDS:
Short Selling, Executive Pay-for-Performance Sensitivity
JOURNAL NAME:
American Journal of Industrial and Business Management,
Vol.8 No.4,
April
28,
2018
ABSTRACT: Based on the launch of short selling in our country
as the background, using the data of the
a-share listed company from 2007 to 2016 in China, we built the model and empirically proved the impact of short selling on the target
company executive compensation contracts. And then
we discussed how the different supervision mechanism and the management rights affected their relationship. This paper finds out that the implementation of
short selling improvedExecutive Pay-for-performance
Sensitivity of the target company. In the weak supervision mechanism of listed
companies, short selling can significantly improve the Executive Pay-for-performance
Sensitivity, while in strong supervision mechanism of listed companies, short
selling can’t play
a role; further from management right consideration, we
found that in the higher management rights of listed companies, short selling
can significantly improve its Executive Pay-for-performance Sensitivity, and in lower management rights of the listed company, short selling has no significant influence on
management compensation contracts.