| Summary: | 碩士 === 國立中正大學 === 企業管理研究所 === 100 === After the financial tsunami, the corporate governance mechanism seems to have been unable to play its effectiveness. In order to restore investor confidence, the corporate governance mechanism should evaluate and strengthen through the evaluation of objective and impartial institution. The evaluation mechanism can enhance the transparency of information and reducing search costs and information asymmetry. It makes investors' to understand the real meaning and quality of corporate governance. In our study, in addition to avoid the look-ahead bias, we use future performance rather than contemporaneous performance to reflect the effect of corporate governance, and then discuss the relationships among corporate governance quality, executive compensation and future operating performance.
In this study, samples are selected from manufacturing industry listed companies in Taiwan from 2005 to 2010. We use regression analysis to figure the relationship between the quality of corporate governance and future performance, and the relationship between executive compensation and future performance. We also use the hierarchical regression to analyze whether the existence of interaction between corporate governance quality and executive compensation effect on future performance. The empirical results are as follows:
First, the company with higher quality score of corporate governance showed the better future performance. Second, the higher executive compensation also showed the better future performance. Third, there is really existence of interaction between corporate governance quality and executive compensation effect on future performance.
Empirical results reveal that the higher quality of corporate governance or executive compensation does enhance the enterprises’ future operating performance and the interaction between corporate governance quality and executive compensation had negative significant with future performance.
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