• Journal of Industrial Convergence
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• v.21 no.2
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• pp.9-16
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• 2023

This study analyzed the effect of manager's ability on compensation policy (compensation level and performance-reward sensitivity). To this end, the final 14,150 company-year data were used for KOSPI and KOSDAQ listed companies excluding the financial industry from 2012 to 2019. As a result of the empirical analysis, the higher the manager's ability, the higher the next reward level (the manager's ability hypothesis), but the performance-reward sensitivity decreased. This confirms the manager ability hypothesis through a positive (+) relationship between manager ability and compensation, and means that high compensation for manager ability may be additional compensation for manager ability other than performance, rather than due to performance. This study differs from previous studies and has contributions in that it examines the more complex effects of managerial ability and compensation system.

• Management & Information Systems Review
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• v.29 no.4
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• pp.333-357
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• 2010

Purposes of this paper are to investigate whether managers' compensation is sticky as accounting performance(ROA) vary or not and explore further what factors influence the managers' compensation stickiness. To empirically study the stickiness of managers' compensation, we used the financial data from manufacturing firms lised in the Korea Stock Exchange(1,000 firm-year data for 4 years). The results are as follows : First, managers' compensation is sticky with respect to change in accounting performance. That is, the increase in managers' compensation as accounting performance increases is greater than the decrease in managers' compensation in respect to equivalent decrease in accounting performance. Second, the degree of managers' compensation stickiness increases when managers have influence and contribution to firm value. Specifically, the degree of stickiness is positively associated with investment opportunity set, intangible assets' value, uncertainty of firms' operating environment, complexity of organizational hierarchy. But firms' size reversely impacts on the degree of managers' compensation stickiness.

• Journal of Digital Convergence
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• v.17 no.4
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• pp.107-114
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• 2019

This study analyzes the effect of the accuracy of future management performance, which managers voluntarily announce in the previous year's disclosure, on managers compensation. In the case of a company that disclosed the bad news in the previous year, the ability to predict uncertain future will be more important, and expects executives with better predictability to receive more compensation. The results of this study show that there is a significant negative(-) relationship between the accuracy of the manager's earnings forecast and the performance - compensation of the firms that disclosed the bad news in the previous year. The accuracy of the manager's disclosure is important, and it is confirmed that the manager's compensation increases as the incentive of the manager's effort to reduce future uncertainty. The results of this study are as follows: there is a positive relationship between the managerial performance and the managerial competence of managers. It is important to note that there is a difference and that we have identified additional determinants of the manager compensation contract.

• Journal of Digital Convergence
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• v.16 no.10
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• pp.125-132
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• 2018

The purpose of this study is to analyze the effect of managerial predictive accuracy on managerial performance-compensation. In this study, we compared managerial performance with managerial performance, And to analyze the relationship between manager compensation and manager compensation using managerial profit prediction accuracy. As a result of this study, there is a significant positive relationship between profit prediction accuracy and manager compensation, which can be interpreted as a result of manager's ability to compensate manager's ability to predict the future well. In this paper, we propose a new methodology that can be used to analyze the effects of managerial compensation on managerial compensation. This is because there is a difference in that it is proved to be a factor. Therefore, it is important to note that the prediction of the future of the company also identifies the additional determinants that affect manager compensation contracts with the key managerial capabilities.

• Management & Information Systems Review
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• v.34 no.3
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• pp.179-196
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• 2015

The purpose of this study is to examine the influence of variable cash compensation depending on short-term performances instead of stock compensation for the executives on the investment in tangible assets, investment and R&D, and profit reconciliation. The detailed objectives of the study include, first, to examine the influence of the cash compensation on investment in tangible assets and profit reconciliation depending on the characteristics of the company and, second, to examine the influence of cash compensation on the profit reconciliation of the investment in R&D depending on the characteristics of the company. The results of the analysis in this study can be summarized as follows; Firstly, the result of the positive analysis, as the compensation for the executives increased, by the characteristics of the companies conducted on the significant 'positive' (+) on the investment in R&D and the profits reconciliation showed that the high tech industry and the share ratio of the executives did not show a significant result, while the debt ratio showed a significantly positive result. Secondly, the result of the positive analysis, as the compensation for the executives increased, by the characteristics of the companieson the significant 'positive' (+) of the investment in tangible assets and reconciliation of profits showed that the high-tech industry did not show a significant result, while the hypothesis on the share ratio of the executives and the hypothesis on the debt ratio showed results that are significantly positive as expected. In other words, it can help Korean companies, which have to investment in R&D and tangible assets to increase their competitiveness and promote future growth dynamics, to design a manager compensation system that is appropriate for our country to support efficient investment decision-making.

• Journal of Digital Convergence
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• v.19 no.12
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• pp.321-329
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• 2021

A measure of managerial ability was derived using DEA, a measure of management efficiency, and the correlation coefficient between discretionary accrual and non-discretionary accrual, net income and operating cash flow standard deviation was used as a proxy for income smoothing. verified. In addition, the manager's compensation was used by taking the natural logarithm of the cash compensation per manager. The analysis results are summarized as follows. The analysis period for hypothesis testing is from 2004 to 2017, as a result of the hypothesis analysis of the correlation with the level of manager's compensation, it was suggested that the income smoothing behavior decreased the performance-based compensation and increased the performance-controlled compensation. This can be said to be the result of indirectly confirming that additional compensation is differentially paid for income smoothing. This study has a contribution to the study by empirically analyzing whether income smoothing affects the relationship between managerial ability and managerial compensation. However, although a number of previous studies empirically analyzed that there are upper and lower bounds for manager compensation, there is limitations that could not be analyzed for asymmetric compensation due to income smoothing is expected to expand.

• Korea Trade Review
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• v.41 no.1
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• pp.67-90
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• 2016

This study examines whether there is any significant relation between executive compensation and future firm performance for the Korean export manufacturing small and medium-sized firms. We sorted the whole sample firms into the sub-groups of 10 deciles by firm size and the KSIC standard. We found the following empirical results. First, Korean export manufacturing small and medium-sized firms typically showed lower or even negative profitability in terms of return on equity and operating profit ratio to sales. Foreign equity ownership is very low with an average of 3.77%. Second, for the firms with higher ratio of excess executive compensation to asset had lower future firm performance. It implies that the typical owner-manager in Korean export manufacturing SMEs earns excess pay, but do not contribute much to firm performance. Third, as for future cumulative abnormal returns for future one- and three-year periods, firms with higher owner-executive pay had lower returns compared with firms with lower pay. So the stock market investors set a lower value on them. Fourth, there is a positive relation between excess executive pay and executive overconfidence, and it implies that owner-CEOs with higher pay may become overconfident, thereby lowering future firm performance somehow.

• Journal of the Korea Convergence Society
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• v.10 no.9
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• pp.221-228
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• 2019

Companies are making great efforts to integrate CSR into various aspects of their management strategies. A lot of research has been conducted on what management intends to do indirectly and indirectly. Was performed. In this study, we conducted additional research considering executive compensation as an indicator of the motivation for management to participate in CSR. The main purpose of this study was to analyze whether accounting performance measures or market performance measures are given more weight when providing rewards for performance to corporate managers conducting CSR activities. The analysis of the relationship between CSR and executive performance-reward sensitivity showed that corporate executives who actively implement CSR pay more weight to market performance measures rather than accounting performance measures. Considering the long-term performance of CSR when paying executives' compensation, the company pays more for market performance than accounting performance. This study is expected to be useful for executives to design compensation contracts to actively induce CSR implementation.

• Management & Information Systems Review
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• v.32 no.1
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• pp.259-272
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• 2013

This Paper document that managers' cash compensation is more sensitive to negative stock return than positive stock return. Also, this paper analyse that managers' cash compensation react symmetrically to accounting earnings and losses. Since stock returns include both unrealized gains and unrealized losses, we expect managers' cash compensation to be less sensitive to stock returns when returns contain unrealized gains(positive returns) than when returns contain unrealized losses(negative returns). But accounting earnings exclude unrealized gains and include unrealized losses, so managers' cash compensation will react symmetrically to accounting earnings and losses. Analyzing 5,815 firm-year data for 2000-2011, we find that managers' cash compensation reacts asymmetrically to stock retruns whereas managers' cash compensation reacts symmetrically to accounting performance. This finding is consistent with boards of directors seeking to mitigate ex post settling up problem that would arise of managers' cash compensation was equally sensitive to positive and negative stock return.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.14 no.11
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• pp.5434-5441
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• 2013

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.