A Study of the Relation between Corporate Governance and Top managers’ Compensation.

• Main Authors: ying shiang chen, 陳盈翔
• Other Authors: 劉韻僖
• Format: Others
• Language: zh-TW
• Published: 2006
• Online Access: http://ndltd.ncl.edu.tw/handle/73610671365517489301

碩士 === 東海大學 === 企業管理學系碩士班 === 94 === Abstract In recent years, a number of domestic and foreign enterprises have arisen from financial crisis. Top managers (CEOs) of these big firms try to benefit themselves via unrealistic disclosing of financial reports, and they still receive high payment while companies have bad performance. Even some of the executives take the bias of the system and try to hide from their excessive remuneration, letting stockholders unable to supervise or even lose their rights and protections. As we know, a CEO is the highest level of the organization, and he is responsible for making major decisions；leading overall staff；developing administration management abilities；raising organizational performance. Furthermore, they have direct responsible for organizational success or failure. Therefore, it is difficult and important to design an optimal executive compensation schemes. However, the worst thing of the CEO compensation issue is downward of the firms performance and upward of the executive compensation. This phenomenon calls into questions about the standard of the executive compensation contract；the appropriate connection of CEO compensation and performance, and whether there are other potential elements influence the establishment of the executive compensation. This research considers corporate governance the major factor that influences CEO compensation while a non-linearity in pay-for-performance relation takes place recently. That is, this study tries to examine the relationship between corporate governance mechanism which is composed of stock structure；board structure；CEO variables and executive compensation. Furthermore, this research uses operating performance and growth measures as moderating variables which would intervene the extent of intensity between corporate governance and executive compensation. This study collected relevant financial data of 448 listed companies and took multiple regression analysis to empirically examine the main determinants of CEO compensation. The result shows that the evidence of model 1, testing the relation between corporate governance and CEO compensation supports that board members；CEO family ties；CEO tenures and reputation do have a significant effect on executives compensation. The result also revealed that the evidence of model 2 , testing the relation between corporate governance and CEO compensation while operating performance and corporate characteristics moderates supports that there is a moderating effect between board members；CEO duality；CEO variables and compensation while operating performance were the moderator variables. In addition, there is a moderating effect between corporate governance；CEO duality；CEO variables and compensation while company size was the moderator. However, two indicators of growth rate and foreign sales rate have no effect on corporate governance to CEO compensation. Those empirical results of the study expect to offer a different perspective on determination of the executive pay. Key words：Top managers、compensation determinants、corporate governance、moderator variables.