CEO Excessive Compensation and Firm Performance ― The Impact of Cronyism

• Main Authors: Pin-Chian Wang, 王品鑒
• Other Authors: Jei-Fang Lew
• Format: Others
• Language: zh-TW
• Published: 2013
• Online Access: http://ndltd.ncl.edu.tw/handle/7q4spz

碩士 === 國立高雄應用科技大學 === 會計系 === 101 === Based on an empirical sample of Taiwanese listed and OTC corporations from 2005 to 2010, this paper first examines whether the CEO compensation is associated with director compensation. We find a significant positive relationship between CEO and director compensation. We further investigate whether cronyism or firm complexity exists by examining the relationship between excess compensation and firm performance. We find that excess compensation (both CEO and director) is associated with firm underperformance and therefore conclude that the evidence is consistent with excess compensation due to cronyism effect on firm performance.