An Empirical Study：EVA® and MVA as determinants of executive compensation

• Main Authors: Tzu-Yun Ho, 何紫妘
• Other Authors: Wann-cherng Wang
• Format: Others
• Language: zh-TW
• Published: 2004
• Online Access: http://ndltd.ncl.edu.tw/handle/12271448298666729499

碩士 === 國立成功大學 === 會計學系碩博士班 === 92 === 　This study investigates the relationship between firm performance and executive compensation among domestic and global firms using both accouting-based measures of performance (ROA and ROE) and risk-adjusted measures of performance (EVA and MVA). The data in this study are obtained from Taiwan Economic Journal. The study sample covers the 1998-2002 period and includes listed IT firms in Taiwan. 　According to the evidence, the results are summarized as 　follows: First, the empirical results indicate that there is a positive relationship between executive conpensation and broad measures of firm performance (ROA、ROE、positive EVA and MVA), after controlling for differences in firm size and risk. Second, executive compensation is related to the extent of the firm’s global nature, and MVA is an important determinant of compensation for global firms. Third, comparing to ROA, EVA and MVA are better predictors in managerial pay but not in total compensation. Fourth, executives are rewarded for their efforts to create economic and market value for the firm. Further, their compensation also acts as an incentive for creating additional market value in the future.