Compensation regulation under corporate governance

• Main Authors: Yi-Yang Lee, 李懿洋
• Other Authors: Ching-Ping Shao
• Format: Others
• Language: zh-TW
• Published: 2010
• Online Access: http://ndltd.ncl.edu.tw/handle/60031666840424622254

碩士 === 國立中正大學 === 法律所 === 98 === There is a competition and corporate relationship between compensation and corporate governance. Compensation can enhance corporate governance mechanism, well corporate governance brings business better performance, and better performance compensate agent more. Corporate governance can efficient compensation mechanism to incentive agent and align the benefit between principle and agent. Efficient compensation mechanism can’t align the benefit between principle and agent and lower agency cost under no effective corporate governance framework. Profit Agent compensation mechanism slay the corporate governance framework should protect and facilitate the exercise of shareholder’s right. Shareholder involvement in corporate decision-making seems likely to disrupt the very mechanism that makes the public corporation practicable. Directors have better information and better incentives than do the shareholders. Public corporation in Taiwan should adopt the “Compensation Committee” decision-making framework. This framework builds a due process in compensation decision-making under an independent committee. Shareholders are the final risk taker of corporation. The amount and incentive effect of compensation will affect shareholders’ wealth. Say-on-pay is an activist shareholder effort to rein in executive compensation unrelated to performance by giving shareholders the ability to cast a nonbinding vote on executive compensation packages. Say-on-pay provides needed granularity. Although opponents argue that shareholders can simply vote out directors if they do not like how compensation is handled, the activist shareholder retorts that that is an inefficient way to deal with a specific problem. The corporate governance framework should recognize the rights of stakeholders as established by law and encourage active co-operation between corporations and stakeholders in creating wealth, jobs, and the sustainability of financially sound enterprises. Institutional investors acting in a fiduciary should play an active role in monitor corporate governance. Institutional investors have more information and specialized expertise that may affect the exercise of key ownership rights regarding their investments. The information disclosure is transparency in better corporate governance corporation. There are interest’s conflicts between shareholders and directors when uninformed shareholder delegate compensation decision-making right to Board of directors. Companies have been forced to overhaul not only their compensation disclosures, but also their compensation disclosure controls and procedures. Directors and compensation committees should consider how to accurately and fully disclose compensation decisions and how investors and regulators will react to such disclosures. Taiwan’s compensation information disclosure regulation is insufficient Compare with US regulation. Public companies in Taiwan disclose compensation information is annual report in rough. I suggest Taiwan’s compensation information disclosure regulation should be review and amendment. Before the regulation amendment, by revise listing contracts of Taiwan Exchange and OTC, we can ask public companies disclose all executive compensation information to shareholders and investors. Compensation information should include compensation policy and all elements of executive compensation and should be complete, accurate, understandable, and timely.