| Summary: | 碩士 === 國立聯合大學 === 管理碩士學位學程 === 101 === Some recent empirical studies document that the varying degree of financial flexibility will affect a firm’s payout policy. However, firms pay out funds not only to shareholders, but also to other stakeholders, for example, chief executive officer (CEO), employees or suppliers. Among the stakeholders, since the CEO plays the decision role in company operation, the pay (compensation) to CEO is an important issue. There has been an explosion in academic research on CEO compensation policy. Many prior studies have examined the determinants of CEO compensation policy and documented that firm performance, corporate governance mechanisms, company size, firm risk, industry, and operating cash flows would influence the level and structure of CEO pay. One of these determinants, operating cash flows, is the proxy variable of financial flexibility. This view implies that financial flexibility is a factor to determine the CEO pay. While prior researches investigate the influence of financial flexibility on CEO pay from the aspect of operating cash flow, this study examines it from the broad views of capital structure, liquidity, and their stabilities. In addition, there are no studies investigate the multivariate differences between compensation policies depending on the firms’ characteristics. Hence, in this research we will collect the samples of all publicly traded U.S. firms over the period from 1999 to 2011. Multinomial logistic regression models will be used to detect a variant of financial flexibility proxy variables and their stability on comparing different CEO compensation policies. The results show that firms that increase salary have excess financial flexibility and lower volatility. In addition, increasing non-salary is used by firms with higher temporary non-operating cash flows.
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