The Impact of Entrenchment Index and Consultant On Compensation Committee Quality

• Main Authors: Bui Phuong Chi, 裴方枝
• Other Authors: Chia-Ying Chan
• Format: Others
• Language: en_US
• Published: 2016
• Online Access: http://ndltd.ncl.edu.tw/handle/78341867680342393518

碩士 === 元智大學 === 財務金融暨會計碩士班(財務金融學程) === 104 === Prior studies find that when entrenchment index increase as the limitations on shareholders’ voting power will lead managerial dicision more powerfull and support that they have poor governance. In addition, recent studies examine the CEO compensation mostly related to firm’s performance and effect of compensation committee quality on CEO compensation. Moreover, CEO compensation is affected by disclose rule including compensation consultant requirement. However, the impact of managerial power on compensation committee quality via entrenchment index and policy reform are still scarce. Therefore, the purpose of this paper is to examine the association between compensation committee quality and board governance represented by entrenchment index and the existence of compensation consultant. We use the hand collected data set for S&P100 firms from Edgar-pro database for the period from 2003 to 2012. This study find that there is a positive relationship between compensation committee quality and entrenchment index. Moreover, the interesting finding is even when using specialized consultant tend to lower compensation committee quality. This study not only contributes to examine the effect of entrenchment index association between compensation committee quality and board characteristics but also contribute to the effect of compensation consultant on board governance associate with compensation committee quality.