경영자 보상과 미래 경영성과에 대한 분석: 전망이론의 시각에서

Since the 1970s, U.S. executive compensation has risen significantly, generating interest in its link to corporate performance. Two views exist: one sees it as optimal contract design reducing agency costs; the other views it as executives exploiting their positions. Unlike the U.S., Korea hasn’t seen such rapid compensation growth, with rewards mainly in cash, not stock options, making it difficult to apply U.S. findings to Korea. This study examines the relationship between executive salaries and future shareholder value in Korea, diverging from overseas research. It also explores whether this relationship varies under adverse managerial conditions, using prospect theory, which contrasts with the agency theory perspective of most prior studies. Prospect theory suggests that loss aversion differs from the pursuit of gains. When performance worsens, executives risk losing their jobs and are more sensitive to potential salary loss than to additional rewards from good performance. Thus, the study posits that the link between executive compensation and future corporate performance is stronger under challenging conditions. Empirical analysis shows a positive relationship between executive compensation and the following year’s stock returns as well as earnings, especially in difficult management environments. This study contributes by analyzing the compensation-performance link through prospect theory, focusing on Korean companies with a distinct compensation system from the U.S. The findings aim to enhance understanding of executive compensation and provide insights for designing appropriate compensation structures.