Proceedings of the 2025 5th International Conference on Informatization Economic Development and Management (IEDM 2025)

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Executive Compensation and Corporate Financial Leverage: Empirical Evidence from Listed Companies in China

Authors
Xingyi Qiu1, *
1Business School, HOHAI University, Nanjing, Jiangsu, 211100, China
*Corresponding author. Email: qxytjnk@163.com
Corresponding Author
Xingyi Qiu
Available Online 26 May 2025.
DOI
10.2991/978-94-6463-724-3_14How to use a DOI?
Keywords
Executive Compensation; Financial Leverage; Enterprise Risk Management; Capital Structure; Deleveraging Policy
Abstract

As capital markets evolve, financial leverage has become a critical factor in managing risk and ensuring long-term growth for companies. Executive compensation, a vital aspect of corporate governance, significantly influences financial decisions, risk-taking, and capital structure adjustments. This study empirically examines how executive compensation affects corporate financial leverage under China’s “Deleveraging Policy”, using data from non-financial state-owned and private A-share listed companies between 2015 and 2023. The analysis reveals a strong negative relationship, showing that higher executive compensation reduces financial leverage by encouraging practices like repaying debt and increasing internal and equity financing. The findings are robust, with additional tests confirming the results. Heterogeneity analysis indicates that the impact is more pronounced in state-owned and larger companies. These findings highlight the importance of aligning executive pay with long-term financial stability and sustainability.

Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the 2025 5th International Conference on Informatization Economic Development and Management (IEDM 2025)
Series
Advances in Economics, Business and Management Research
Publication Date
26 May 2025
ISBN
978-94-6463-724-3
ISSN
2352-5428
DOI
10.2991/978-94-6463-724-3_14How to use a DOI?
Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Xingyi Qiu
PY  - 2025
DA  - 2025/05/26
TI  - Executive Compensation and Corporate Financial Leverage: Empirical Evidence from Listed Companies in China
BT  - Proceedings of the 2025 5th International Conference on Informatization Economic Development and Management (IEDM 2025)
PB  - Atlantis Press
SP  - 137
EP  - 150
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-724-3_14
DO  - 10.2991/978-94-6463-724-3_14
ID  - Qiu2025
ER  -