Abstract: Excessive debt is not conducive to the sustainable development of enterprises. By employing both the agency theory of managerial opportunism and the agency theory of limited ability, this paper explores the relationships between managerial equity incentive, one person being both the chairman and the general manager, and enterprise over-debt in the context of the length of management tenure being different. The results show that when the tenure is shorter, there is no significant correlation between equity incentive and over-debt, while one person being both chairman and general manager is negatively correlated with enterprise over-debt. However, as the tenure increases, there appears a tendency of negative correlation between equity incentive and over-debt, while the negative correlation between one person holding two positions and over debt is weakened. When the tenure is longer, with the increase of equity incentive, the enterprise over-debt ratio presents a significant U-type tendency of first decrease then increase. Compared with the enterprises that adopt the policy of two-person-two-position, the enterprises that adopt the policy of one person being both chairman and general manager are more likely have over debts. This conclusion can provide theoretical support and decision-making basis for enterprises to choose effective incentive and restraint mechanism to reduce their over debts.

Key words: enterprise over-debt; equity incentive; one person being both chairman and general manager; tenure of management; agency theory