The Relationship between Executive Compensation and Earnings Management

• Main Authors: Pei-Fong Wu, 吳佩芳
• Other Authors: Chiung-Yao Huang
• Format: Others
• Language: zh-TW
• Published: 2013
• Online Access: http://ndltd.ncl.edu.tw/handle/55963343373589249308

碩士 === 國立雲林科技大學 === 會計系碩士班 === 101 === As the market economy goes toward internationalization and liberalization of development, the company gradually separates management and ownership and then results in the agency problems. The company pays senior managers bountiful salaries, so we hope to be able to alleviate the occurrence of the agency problems and motivate managers can reap more benefits for the company. In the 2008 of financial tsunami, many large companies whose poor performance or loss again and again required the government bailout, but the senior managers of these enterprises still get highly paid, who become fat cats in the enterprises are unreasonable phenomenon. In order to make pay salaries more reasonable, the authorities in Taiwan also require the listed companies must establish a remuneration committee to implement corporate governance, improve the monitoring functions and strengthen management mechanisms. This study focused on the relationship between manager''s compensation and earnings management. Sample the listed (OTC) companies in Taiwan in 2008-2011 and apply multiple regression analysis to testing this hypothesis, the empirical results show that senior managers of fixed salary and earnings management does not correlated. In addition, variable salaries and earnings management are a significant positive relationship. Finally, this study provides the practical management implications.