{"title":"Deferred CEO Compensation and Firm Investment Decisions","authors":"YoungHa Ki, T. Mukherjee","doi":"10.2139/ssrn.2901805","DOIUrl":null,"url":null,"abstract":"For more than a decade, to reduce the agency problem, various ways have been examined on how to align the interest of manager with shareholders. However, evidence and empirical findings are conflicting on the agency problem. Recently, deferred compensation as one of incentive compensations draws the attention as a means to incentivize CEOs to make them work for the firm. However, it is still not evident if deferred compensation has effect on aligning CEOs with the firm’s goal possibly due to the issue on data. Therefore, the first essay investigates if deferred compensation has the effect on the agency problem and on the improvement of the firm performance after dealing with the data issue. This paper mainly aims to investigate if there is a non-linear relationship between the investment choice problem and the deferred compensation as Jensen and Meckling (1976) claim. This paper concludes that deferred compensation from NQDC table has positive and significant effect on the firm performance and the investment choice problem. Following McConnell and Servaes (1990), this paper finds the curvilinear relationship between Tobin’s Q and the deferred compensation and can confirm Jensen and Meckling (1976) theoretical application.","PeriodicalId":367100,"journal":{"name":"ERN: Other Econometrics: Applied Econometric Modeling in Financial Economics - Econometrics of Corporate Finance & Governance (Topic)","volume":"106 1","pages":"0"},"PeriodicalIF":0.0000,"publicationDate":"2016-05-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"2","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"ERN: Other Econometrics: Applied Econometric Modeling in Financial Economics - Econometrics of Corporate Finance & Governance (Topic)","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.2139/ssrn.2901805","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}
引用次数: 2
Abstract
For more than a decade, to reduce the agency problem, various ways have been examined on how to align the interest of manager with shareholders. However, evidence and empirical findings are conflicting on the agency problem. Recently, deferred compensation as one of incentive compensations draws the attention as a means to incentivize CEOs to make them work for the firm. However, it is still not evident if deferred compensation has effect on aligning CEOs with the firm’s goal possibly due to the issue on data. Therefore, the first essay investigates if deferred compensation has the effect on the agency problem and on the improvement of the firm performance after dealing with the data issue. This paper mainly aims to investigate if there is a non-linear relationship between the investment choice problem and the deferred compensation as Jensen and Meckling (1976) claim. This paper concludes that deferred compensation from NQDC table has positive and significant effect on the firm performance and the investment choice problem. Following McConnell and Servaes (1990), this paper finds the curvilinear relationship between Tobin’s Q and the deferred compensation and can confirm Jensen and Meckling (1976) theoretical application.
十多年来,为了减少代理问题,人们研究了如何使管理者的利益与股东的利益保持一致的各种方法。然而,在代理问题上,证据和实证研究结果是相互矛盾的。递延薪酬作为激励性薪酬的一种,作为激励ceo为公司工作的一种手段,近年来备受关注。然而,由于数据问题,延迟薪酬是否对首席执行官与公司目标保持一致有影响,这一点仍然不明显。因此,第一篇论文在处理了数据问题后,研究了递延薪酬是否对代理问题和企业绩效的改善有影响。本文的主要目的是考察投资选择问题与递延补偿之间是否存在如Jensen和Meckling(1976)所主张的非线性关系。研究表明,NQDC表中的递延薪酬对企业绩效和投资选择问题具有显著的正向影响。继McConnell and Servaes(1990)之后,本文发现了Tobin’s Q与递延补偿之间的曲线关系,并证实了Jensen and Meckling(1976)的理论应用。