In the wake of a recent slew of high-profile financial scandals, numerous corporations are reexamining compensation policies, and particularly CEO compensation structures. Numerous firms are reducing their reliance on stock options for CEO compensation, in favor of options such as restricted stock, stock awards, and cash bonuses. Examples of such firms include Microsoft, Hewlett-Packard, and others. Therefore, this study investigated the determinants of CEO compensation structure, and emphasized the crucial influences on the relationships between CEO compensation structure and corporate performance. First, this work examined whether the relative use of accounting or market performance measures to determine top executive compensation structure is influenced by corporate, CEO, or industry characteristics. The empirical results of this study indicate that CEO compensation structure is influenced most strongly by firm size, followed by accounting performance measures, and next by firm leverage. Additionally, the relative importance of accounting versus market performance measures for CEO compensation structure is influenced by CEO, corporate, and industry characteristics, such as firm growth opportunities and risk, CEO stockholdings, and industry competitiveness. Second, this study provides empirical evidence that the relationship between CEO compensation structure and non-financial performance measures is also influenced by CEO, corporate, and industry characteristics. Finally, this research shows that the 2006 amendment to the Guidelines relating to the disclosure of executive remuneration and the amendment to the Business Accounting Law relating to expensing employee stock bonus from 2008 have had diverse effects on the sensitivity of CEO compensation structure to performance measures.
英文關鍵字
CEO Compensation Structure, Pay-Performance-Sensitivity, Corporate/ Industry Characteristics, CEO Characteristics
