Debt-Based Executive Compensation Design and Implementation Improvement in China

摘要

To avoid the negative effects of financial crises,some listed companies gradually start to implement debt-based compensation such as pensions and deferred compensation for top executives.This new compensation policy will better integrate the interest of bondholders with that of executives and help to prevent aggressive and risky actions.This article firstly provides a general introduction of inside debt and its causes.Then it gives literature reviews of prior research and papers about the origin and development of debt-based compensation.Secondly,this article analyzes the feathers and advantages of inside debt and the optimal structure of executive compensation.Thirdly,it also illustrates implementation status of debt-based compensation in China and relevant suggestions for potential improvement.Finally,several future research areas are pointed out.