보상위원회 도입이 경영자보상에 미치는 영향과 소유구조에 따른 차이

This study investigates whether the effect of voluntary adoption and formation of compensation committee varies according to the ownership structure. We use 128 firm-year sample data for the period 2002-2010 with the compensation committees and match with 238 firm-year control data without them based on the year, industry and firm size. This study examines whether or not the effect of compensation committee in terms of executive compensation is different depending on the ownership structure, so that divides the sample data into managerial ownership group and professional manager group. As a result of examining whether the compensation committee determines an executive compensation based on the managers’ performance measures in the case of the managerial ownership, the difference is not significant. This implies that managerial ownership provides the manager the incentive to take action beneficial for shareholders and it is likely that the necessity of introducing the compensation committee is little because manager can have control power over the board of directors. Particularly in the case of Korea, managers with managerial ownership can possess managerial entrenchment over the board of directors as a head of company in large business conglomerates substantially, so it is difficult for the outside directors or compensation committees to control the behavior of manager and determine the amount of executive compensation. On the other hand, in the case of professional manager, the sensitivity of performance measure in CEO compensation is significantly higher for firms with compensation committee than firms without it. It is interpreted that the compensation committee provides incentives to long-term and short-term performance by raising the sensitivity of long-term and short-term performance measures, which are rate of return and return on asset respectively, to professional managers who are likely to avoid long-term investment. Through the compensation committees, it is able to eliminate the horizon problem of the manager with a myopia by providing well-balanced compensation structure. Finally, we investigated whether the compensation weight is adjusted to reflect the correlation between performance measures when performance indexes are not independent to each other this. In the case where there is a possibility of double compensation due to the positive correlation between the return on asset and the stock price performance as the manager performance indicators, the optimum compensation contract has to eliminate the double increase due to positive correlation between performance measures. As a result of empirically research, when compensation committees in professional management system shows the adjustment for preventing the double compensation by subtracting the performance measures’ interaction effects from the main effect. It can be interpreted that the compensation committee considers the possibility of double compensation and make executive compensation structure by subtracting the effects of return on asset from the effects of stock price performance as if independent measures are included in compensation contract. This paper has following contribution. First, we show the difference in effectiveness of compensation committee adoption according to corporate ownership structure. These results summarize the mixed result of previous studies. Second, we analyze that optimal compensation contract is constructed by considering the positive correlation between stock price return and return on asset. This implies that dual compensation problem due to the interaction between indicators has to be considered for examining the executive compensation. Collectively, this paper extends the accounting literature on executive compensation by examining whether the effectiveness of compensation committee is affected by ownership structure.