What factors influence the managers' compensation stickiness

경영자 보상의 하방경직성에 영향을 미치는 요인

  • Chi, Sung-Kwon (Division of Business Administration, Pusan National University)
  • Received : 2010.12.03
  • Accepted : 2010.12.22
  • Published : 2010.12.31

Abstract

Purposes of this paper are to investigate whether managers' compensation is sticky as accounting performance(ROA) vary or not and explore further what factors influence the managers' compensation stickiness. To empirically study the stickiness of managers' compensation, we used the financial data from manufacturing firms lised in the Korea Stock Exchange(1,000 firm-year data for 4 years). The results are as follows : First, managers' compensation is sticky with respect to change in accounting performance. That is, the increase in managers' compensation as accounting performance increases is greater than the decrease in managers' compensation in respect to equivalent decrease in accounting performance. Second, the degree of managers' compensation stickiness increases when managers have influence and contribution to firm value. Specifically, the degree of stickiness is positively associated with investment opportunity set, intangible assets' value, uncertainty of firms' operating environment, complexity of organizational hierarchy. But firms' size reversely impacts on the degree of managers' compensation stickiness.

Acknowledgement

Supported by : 부산대학교