The Effect of Innovation Activity''s Risk in Executive Compensation

• Main Authors: Yun-jhen Peng, 彭韻臻
• Other Authors: none
• Format: Others
• Language: zh-TW
• Published: 2010
• Online Access: http://ndltd.ncl.edu.tw/handle/06919942768684055063

碩士 === 國立中正大學 === 會計與資訊科技研究所 === 98 === The purpose of this study is to examine the effect of different firm risks on long-term compensation which inspires the investment on R&D. This study based on 1,511 listed companies in Taiwan during 2006-2008, and collected financial and executive compensation data from TEJ( Taiwan Economic Journal) database. The primary empirical results are as follows: 1.There is a positive relation between R&D expenditure and long-term compensation. All kinds of firm risk factors do not affect the association between R&D and long-term compensation in electronics industry .However, the stock (financial risk) and sales return(operating risk) standard deviation reduce the positive relation between R&D and long-term compensation in non-electronics industry. 2.In OBM and ODM/OEM firms, there is a positive relation between R&D expenditure and long-term compensation. When concerning the risk factor, the operating cash flow standard deviation (operating risk) will affect the positive relation between R&D and long-term compensation, but the stock and sales return risk do not have such an effect in ODM/OEM firms. In OBM firms, the stock return risk (financial risk) will affect the positive relation between R&D and long-term compensation, but the extent is lower than the ODM/OEM firms’ operating cash flow risk. To sum up, different industries and operating modes have different risk preference; therefore, designing the executive’s long-term compensation affects their risk management and attitude to achieve the alignment between managers and firms'' goal.