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http://dx.doi.org/10.5392/JKCA.2020.20.11.184

The Effects of Female Auditors on the Sensitivity of Executive Compensation to Performance  

Luo, Jing (상명대학교 대학원 국제통상학과)
Cho, Young-Gon (상명대학교 글로벌경영학과)
Publication Information
The Journal of the Korea Contents Association / v.20, no.11, 2020 , pp. 184-191 More about this Journal
Abstract
Using 850 disclosures of individual executive compensation from 2014 to 2017, this study examines the impact of female auditors on the sensitivity of executive compensation-performance relation. The major findings as follow: First, Female auditors have positive effects on the sensitivity of executive compensation to performance, implying that when auditors are appointed to be females who are more ethical, of high moral development, risk averse and conservative as well, they play an efficient monitoring role in aligning executive compensation to performance. Second, the monitoring effects of female auditors on the sensitivity of executive compensation to performance are significant when they are full time employed, suggesting that gender-based differences are more likely to be realized on the condition that they are in position to commit to their jobs for their owns. The results overall support that female auditors exercise efficient monitoring roles in aligning executive compensation to performance in Korean listed firms. The research contribute to complement the study of gender effects on corporate decision making, which have been focused on gender diversity of the board, by providing empirical evidence of the impact of female auditors on the sensitivity of executive compensation-performance relation.
Keywords
Female Auditors; Executive Compensation; Compensation-Performance Sensitivity; Audit Committee;
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