| Summary: | 碩士 === 國立臺北大學 === 會計學系 === 105 === If enterprises lack of internal control, CEOs may make harm to the companies interests and shareholders’ behavior. According to the optimal contracting theory, the boards understand the nature and connotation of the reporting figure and then adjust the compensation contracts. However, the managerial power approach considers that top executives will influence their contracts to obtain excess compensation. CEOs’ cash dividends affected by the accounting earnings, so for their own interests, CEOs have incentives to earnings management. And CEOs’ stock market dividends affected by market performance, lack of internal control will result in stock prices fall, so CEO have incentives to improve the quality of internal control. Therefore, this study explores whether the proportion of the cash dividends relative to the stock dividends will affect the sensitivity of internal control to compensation performance sensitivity.
In this study, the US listed companies, excluding financial industries, were selected as research subjects from 2003 to 2013, and a two-stage method was used. The empirical results indicate that the proportion of the cash dividends relative to the stock dividends will affect the sensitivity of internal control to compensation performance sensitivity, which support the managerial power approach. CEOs with high cash dividends, their compensation performance sensitivity is high. CEOs will use their power to make the internal control quality low, in order to obtain excess compensation.
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