| Summary: | 碩士 === 淡江大學 === 財務金融學系碩士在職專班 === 98 === By employing panel smooth transition regression (PSTR), this research analyzes the impact of top executive compensation on firm performance. A total of 881 samples are collected from Taiwan Economic Journal and the sample period runs from 2005 to 2008.
The empirical findings show that when ROA and EPS are used to proxy for the firm performance, there exists smooth transition phenomenon for the relationship between the top executive compensation and firm performance. The evidence illustrate that increases of the top executive compensation will bring benefit to firm performance when firm is in a loss condition. On the contrary, when firm is in a comparative earning condition, increases of the top executive compensation can not bring any benefit to firm performance.
Moreover, the various effects of the control variables on the ROA and EPS are clearly illustrated in chapter 4 of this thesis. All the findings suggest that the firm’s operation should properly increase the top executive compensation to achieve the goals of maximization of firm value.
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