| Summary: | 碩士 === 雲林科技大學 === 會計系研究所 === 98 === Since the subprime mortgage crisis broke out in 2008, many corporations have been bankrupted or facing business downsizing, but their executive still receives high compensations. With the economy contracting and stock prices falling, recent media and public attention has focused on executive compensation, especially become more concerned with the unreasonable phenomenon of corporate “Fat Cat” and “Golden Parachute”.
This purpose of this study is to examine whether pay to executive abnormal variance compensation would help to raise the firm performance. Based on the data for of the companies listed on Taiwan Stock Exchange and Taiwan OTC from 2001 to 2007, the empirical study results show the executive abnormal variance compensation tends to have poorer corporation performance. In addition, the company with worse credit rating, executive abnormal variance compensation is significantly negative associated with corporation performance. Finally, compared with OTC companies, executives in the TSE companies with higher abnormal variance compensation, this portion may be eroding the firm performance.
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