| Summary: | 碩士 === 國立彰化師範大學 === 會計學系 === 96 === This study investigates whether the board of directors seeks to prevent opportunistic reductions in R&D expenditures when the CEO approaches retirement (the horizon problem) and the firm faces a small earnings decline or a small loss (the myopia problem). In addition, the study examines the influence of family and non-family control firms on the association with R&D expenditures and CEO compensation. What is more, the study also explores the effect of growth opportunity and the criterion which Chairman also serves as CEO on the abovementioned association.
The results are showed that there is an insignificant and positive relationship between changes in R&D expenditures and changes in CEO compensation when CEO approaches retirement, but there is a significant and positive relationship when the firm faces a small earnings decline or a small loss. If the samples are divided into family and non-family control groups, when CEO approaches retirement, only in non-family control firms, a significantly positive relationship between changes in R&D expenditures and changes in CEO compensation discourages CEOs from cutting R&D spending, but when firm faces a small earnings decline or a small loss, neither in family- nor non-family control firms, there is a significant and positive relationship. After the samples are classified according to the different ownership structure, then the sub-samples are respectively divided into two groups with growth opportunity and the criterion whether Chairman also serves as CEO or not. When CEO approaches retirement or the firm faces a small earnings decline or a small loss, only in non-family contrl firms which have higher growth opportunity, there is a significant and positive relationship between changes in R&D expenditures and changes in CEO compensation. Similarly, if Chairman does not serve as CEO, compared to family control firms, the board in non-family control firms seeks to prevent opportunistic reductions in R&D expenditures both in the presence of the CEO approaching retirement and in the presence of the firm facing a small earnings decline or a small loss.
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