| Summary: | 碩士 === 國立高雄第一科技大學 === 會計資訊研究所 === 103 === Family controlled firms are popular phenomena in Taiwan; their operation performance is determinant to the economic stability and future development of Taiwan. Our paper is aimed to explore the impacts of family control on firm performance. The active participations of the family members in the top management, especially as a family CEO, may affect this connection, will be positively enhanced or negatively abated? In this paper we exam the empirical links between family ownership, CEO incentive compensation contract and family CEOs using a sample of 3,813 firm-year observations during the 3-year period from 2010 to 2012. As hypothesized, we find a positive and significant relation between performance, family ownership and family CEOs. Also consistent with expectations, we find a positive and significant correlation between CEO fixed compensation proportion and performance, and a significant negative connection between CEO variable compensation proportion. In contrast to our expectation, the relationship to excess remuneration is negative and significant.
Overall, our analyses indicate that the presence of the family control and family CEOs has a significant and positive impact on firm performance. While it aligns the interest of shareholders and managers, it strengthens family power and aggravates agency conflicts between small and large shareholders when a family member serves as the CEO; it also mitigates agency conflicts between management and shareholders. The interest conflicts between small and large stockholders is compensated with the reduction of agency cost contributed by the interest alignment of family ownership and management. The performance motivation mechanism of family firm should be built in the variable compensation component of the contract, like the non-family firm. The negative correlation regarding excess remuneration could be resulted from the value creating performance of the family CEOs, which still compatible or even under compensated.
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