Customer concentration is an important factor influencing corporate gov-ernance decisions.This paper examines the impact of customer concentration on execut-ive compensation stickiness using a sample of A-share listed companies from 2007 to 2018.The study finds that higher customer concentration leads to greater executive com-pensation stickiness.Further analysis reveals that this positive relationship is more pro-nounced when customer concentration poses higher risks to the company(such as non-af-filiated or no local customers,higher company-specific investments,lower market share,and more intense product market competition)or when the company requires greater in-centives for executives to undertake risks(such as abundant investment opportunities).The results suggest that companies with higher customer concentration tend to design ex-ecutive compensation contracts with high stickiness to motivate executives,following the concept of rewarding the good without punishing the bad.Unlike developed countries that use stock options to incentivize risk-taking among executives,this paper provides empir-ical evidence for the design of convex cash compensation contracts in developing coun-tries'listed companies.
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