Abstract
This study aims to explore the impact of CEO compensation on aggressive tax planning (ATP) in China's A-share listed companies, and to reveal the moderating effect of firm size on CEO compensation and ATP. This study uses panel data analysis to explore the relationship between CEO compensation and ATP in China. From the perspective of listed companies in China, the largest developing market, during 2017-2022, the study provides evidence that CEO compensation is positively correlated with ATP, and that this relationship is also moderated by firm size. This study recognizes the crucial role of CEO compensation in the ATP of Chinese listed companies, and fills the gap of previous studies by studying the impact of CEO compensation. At the same time, the novel introduction of firm size as a moderating variable also highlights its effectiveness in Chinese corporate governance. The findings have important implications for participants in China's listed companies, managers' labor markets, and tax regulators. The unavailability of data, the sampling selection of companies, and the impact of focusing only on CEOs without considering other executives in the sample constitute limitations of this study. Although these limitations may weaken the explanatory power of the model, they set the avenue for future research.
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