Director Optimal Pay against Fat Cats in Taiwan

Feng-Li Lin, Shiow-Jen Wang and Guan-Hao Peng

Accounting and Finance Research, 2015, vol. 4, issue 3, 31

Abstract: Due to the overcompensation phenomenon that exists in Taiwan, the "fat cat" issue continues to persist; therefore, vast reforms in regards to director compensation have been prompted in recent years. This investigation assessed 665 Taiwanese firms listed on the Taiwanese Stock exchange over a 10-year period (2002-2011). The main purpose is to test whether there is an optimal level of director compensation, which maximizes firm value. This study adopts Tobin's Q as the proxy for firm value and finds that director compensation between 0.0283 percent and 2.3077 percent is an optimal level to maximize firm value. These results show that when control-affiliated directors have incentives to increase firm value, they serve as reliable monitors due to their individual financial gains.Keywords- Nonlinear, Firm value, Fat cat, Director compensation, Optimal levelJEL classification- G31, G32, G34, G35, G38Â

Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.sciedupress.com/journal/index.php/afr/article/download/7097/4377 (application/pdf)
https://www.sciedupress.com/journal/index.php/afr/article/view/7097 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:jfr:afr111:v:4:y:2015:i:3:p:31

Access Statistics for this article

More articles in Accounting and Finance Research from Sciedu Press Contact information at EDIRC.
Bibliographic data for series maintained by Sciedu Press ().