The Empirical Study of Top Management Pay-Performance Sensitivity and Capital-Investment Efficiency

• Main Authors: Huang Yi-Ting, 黃意庭
• Other Authors: Chen Yu-ru
• Format: Others
• Language: zh-TW
• Online Access: http://ndltd.ncl.edu.tw/handle/58692273604481728504

碩士 === 國立彰化師範大學 === 財務金融技術學系 === 103 === The purpose of this paper is to explore the impact of Top Management Pay-Performance Sensitivity and Capital-Investment Efficiency. This study obtained samples of stock listed companies in Taiwan from the Taiwan Economic Journal Database from 2005 through 2012. Our findings suggest that Top Management Pay-Performance Sensitivity have an impact on over-investment. The reason of the myopic investment arises from the fact that the top management attempted to improve their remuneration. The higher the correlations between capital-investment and pay-performance sensitivity, the more income-increasing accounting choices top management make. Hence the high discretionary accruals are significantly affected. Finally, we argue that the top management, when facing the myopic investment who has greater incentive to adopt income-increasing discretionary accruals. Future recommendations to the executive board to executive compensation design this must consider the degree of association between pay-performance sensitivity and capital-investment in compensation design.