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http://dx.doi.org/10.5762/KAIS.2013.14.11.5434

Control-Ownership Disparity and Executive Compensation  

Cho, Young-Gon (Department of International Trade and Business, Sangmyung University)
Publication Information
Journal of the Korea Academia-Industrial cooperation Society / v.14, no.11, 2013 , pp. 5434-5441 More about this Journal
Abstract
Using longitudinal data of 575 sample from 122 firms in large business conglomerates from 2001 to 2008, this study examines the impact of controlling shareholders' control-ownership disparity on executive compensation. The empirical study finds that controlling shareholders' control-ownership disparity is negatively related to the level of executive compensation and moderate negatively the relation between firm performance and executive compensation. This finding suggests that controlling shareholders' control rights in excess of ownership rights lead to decreased executive compensation in order to relieve the concerns of stakeholder about the potential agency costs of controlling shareholder, and have, on the other hand, entrenchment effects on the decision of executive compensation by decreasing its sensitivity on firm performance.
Keywords
Control-Ownership Disparity; Controlling Shareholder; Executive Compensation;
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