À繫¿¬±¸ Á¦ ±Ç È£ (2014³â 5¿ù)
Asian Review of Financial Research, Vol., No..
pp.1059~1084
pp.1059~1084
Executive Compensation When a Firm is a Business Group Member
Hyungseok Kim Korea University Business School
Woochan Kim Associate Professor of Finance, Korea University Business School and Research Associate of ECGI.
This paper examines how executive pay is set when a firm is a business group member. Using Korea as a laboratory setting, we find that member firm¡¯s cash compensation for its executives is strongly linked to the stock performance of other members as well as its own. Further analyses reveal that this link to other members¡¯ performance is consistent with the hypothesis of corporate resources being tunneled from one member to another for the benefit of the controlling family. We find that the link is stronger in firms with high control-ownership disparity or low foreign ownership. We also find that the link is tighter to the performance of firms directly owned by the controlling family.
Hyungseok Kim
Woochan Kim
This paper examines how executive pay is set when a firm is a business group member. Using Korea as a laboratory setting, we find that member firm¡¯s cash compensation for its executives is strongly linked to the stock performance of other members as well as its own. Further analyses reveal that this link to other members¡¯ performance is consistent with the hypothesis of corporate resources being tunneled from one member to another for the benefit of the controlling family. We find that the link is stronger in firms with high control-ownership disparity or low foreign ownership. We also find that the link is tighter to the performance of firms directly owned by the controlling family.
[ 07327 ] 67-8, Yeouinaru-ro, Yeongdeungpo-gu, Seoul, Korea TEL. +82-2-2003-9921 FAX. +82-2-2003-9979 E-mail. office@korfin.org COPYRIGHT(C) SINCE 1987 KOREAN FINANCE ASSOCIATION. All rights reserved.