• Management & Information Systems Review
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• v.35 no.1
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• pp.173-188
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• 2016

The introduction and operation of compensation committee can affect managers' incentive-compensation system. In this context, The purpose of this paper examines whether managers' pay-performance sensitivity is affected by the quality of the compensation committee(compensation committee size, the proportion of outside directors on the compensation committee, the proportion of directors with 2 or more non additional board seats on the compensation committee) To test this hypothesis, we use a sample of 260 firm-year observations between 2001-2013. The results are as follows. Firstly, we find that no significant relevance between the compensation committee size and pay-performance sensitivity. But the proportion of outside directors on the compensation committee and the proportion of directors with 2 or more non additional board seats on the compensation committee is positively associated with both pay-earnings based performance sensitivity and pay-stock based performance sensitivity. Secondly, we find that the integration quality of the compensation committee is positively associated with both pay-earnings based performance sensitivity and pay-stock based performance sensitivity. Overall, our analysis suggests that compensation committee are important mechanism in the design of efficient incentive-compensation system.

• Journal of Industrial Convergence
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• v.20 no.11
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• pp.105-112
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• 2022

The purpose of this study is to examine the moderating effect of the reporting earnings strategy on the relationship between managerial ability and manager performance-reward sensitivity. Both upward and downward adjustments can occur in the direction of management performance adjustment according to the manager's reporting earnings strategy. was found to decrease performance-based performance-reward sensitivity. The underreporting strategy is hypothesized that, although additional compensation is paid for the performance of the reporting strategy according to the manager's ability, the level of compensation increases, but this type of compensation will decrease the performance-reward sensitivity because this type of compensation is irrelevant to the actual performance of the manager. This is the result of indirectly confirming that discriminatory compensation is provided for upward and downward adjustment of business performance according to the reporting earnings strategy.

• 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.30 no.4
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• pp.339-358
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• 2011

This study analyzes whether there are differences in the level of compensation and pay-performance sensitivity between venture firms and non-venture firms listed on KOSDAQ. To test the above mentioned purpose, this study uses 726 firm-year data listed on KOSDAQ from 2006 to 2009. The results are as follow: First, we find that managers' compensation level of venture firms are higher than non-venture firms. Second, pay-stock performance sensitivity is higher than pay-accounting performance sensitivity in venture firms. Overall, because venture firms give a lot of stock-option to managers, compensation level of venture firms is higher than other firms. Also, venture firms set higher pay-stock performance sensitivity than pay-accounting performance sensitivity to mitigate short-sighted decision.

• The Journal of the Korea Contents Association
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• v.20 no.11
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• pp.184-191
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• 2020

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.

• 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.

• 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 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.

• 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.

• The Journal of the Korea Contents Association
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• v.21 no.8
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• pp.285-293
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• 2021

This study aims to identify the relationship between outcome expectancy and illegal use of music sources, and examined the parallel double mediating model of reward sensitivity and social dilution of responsibility on that relationship. To achieve the purpose this study, data were collected from 302 male and female high school students living in Seoul metropolitan area, and a double mediating effect was analysed with PROCESS Macro 3.5 Model 4. Results indicated that outcome expectancy was positively correlated with reward sensitivity, social dilution of responsibility, and illegal use of music sources of high school students, whereas reward sensitivity and social dilution of responsibility were positively correlated with illegal use of music sources. This study found that reward sensitivity and social dilution of responsibility were mediating outcome expectancy and illegal use of music sources in parallel. These findings suggest that psychological mechanisms lead adolescents use illegal music sources might be important, and provide useful information for making strategies to prevent adolescents' uses of illegal music sources.