경영자 보상과 특허권 취득의 장기유인효과

This study aims to investigate the effects of a patent as a outcome of long－term investment activity on executive compensation. This paper extends the accounting literature on executive compensation by examining whether the executive compensation is related to corporate patenting activity as a long－term performance measure. Previous studies that analyze the long－term incentive effects of companies’ reward system using R&D expenditures find no significant relationship between a long－term performance measure and compensation. However, R&D expenditure has some limitations as a long－term performance measure because it is directly affected by managers’ discretion and only an input of long－term investments, which does not provide any information about the success of investments. Therefore, we attempt to analyze the long－term incentive effect on compensation using the number of registered patents, an outcome of long－term investments, which is not affected by the discretion of managers. The empirical results show that the patent registration activity has a significant effect on the long－term incentive compensation. Further analyses investigate the two circumstances in which shareholders need to provide long－term incentives for managers, i.e., when managers are close to the retirement or when the possibility of earnings management is high. Consistent with our prediction, we find higher incentive weights on the number of registered patents when the age of manager is higher than 57 or when the company engages in earnings management to report small profits.