The Relationship between Performance, Stock Holding and Average Compensation of Board of Directors: Evidence from Listed Cement Companies in Taiwan Stock Exchange

• Main Authors: Shin-tung Yueh, 岳世同
• Other Authors: Chi-yuan Lin
• Format: Others
• Language: zh-TW
• Online Access: http://ndltd.ncl.edu.tw/handle/60635165234857777431

碩士 === 國立嘉義大學 === 管院碩士在職專班(EMBA Program at College of Manageme === 98 === In recent years, the government has been giving impetus to the strengthening of corporate governance policies in order to solve agency problems. Due to the board of directors acting on the behalf of the shareholders, drawing up company operating strategies as well as the supervision of company operations, they are highly related to corporate performance. By continuously revising the laws concerning the board of directors, we can make the authority, stock-ownership and compensation of the board of directors more transparent and institutionalized. Studies, both local and abroad, concerning the board of directors’ relation to shares, compensation as well as company performance are plentiful. However, the results are not identical; this could be because of the wide variety of industries, with each having a different characteristic. On the other hand, these relative studies have never analyzed whether the increase in business performance are caused by the decrease in company expenses and cost. In order to avoid the effect that might arise from different industries or products from influencing the results. This study has chosen seven specific cement companies in Taiwan as samples to investigate the relations between the indicators, the board of directors’ shares, compensation and company performance; as well as analyzing the relations of the board of directors’ shares and compensation to company expenses and cost. The independent variables are the stock holding ratio of board of directors (BSH) and the compensation of board of directors (ABSC) and introduce the return on assets (ROA)、return on equity (ROE)、net profit margin (NPM)、price-book ratio (PBR)、operating expense cost rate (OECR) as the financial assessing indicators of corporate performance. The research period is between 2002 and 2008. The following are the empirical results： 一、The stock holding ratio of board of directors is significantly positive related to the return on assets and the net profit margin. 二、The average compensation of board of directors is significantly positive related to the return on assets、 return on equity、net profit margin、price-book ratio. 三、The stock holding ratio of board of directors and the average compensation of board of directors are significantly negative related to the operating expense cost rate. From the empirical results above, we can see that the higher the stock holding ratio and compensation of the board of directors, the higher the company’s return rate, and the lower the company’s operating cost will be. Illustrating the fractional influence to the stock holding ratio and compensation of board of directors resulted from the increase of corporate-operating efficiency.