Executive bonus compensation and financial leverage: do growth and executive ownership matter?

Purpose This study aims to examine the impact of executive bonus compensation on a firm’s financial leverage policy and extent which this compensation–leverage relation is moderated by firm growth ownership. Design/methodology/approach Using data from 213 non-financial non-utility UK FTSE 350 firms for period 2007–2015, generating total 1,784 firm-year observations, panel econometric methods are used test model. Findings Drawing insights agency theoretic view, paper uncovers that managerial cash negatively significantly related leverage. However, stock has positive significant also observes both The results remain robust alternative models. Originality/value While builds risk-motivated argument literature, it first – best knowledge explore compensation-corporate and, particularly, corporate ownership matter in relationship.