DO FIRMS BENEFIT FROM THE COMPENSATION COMMITTEE MANDATE IN TAIWAN?

我國於2010年11月通過證券交易法第十四之六條，規定股票已在證券交易所上市或於證券商營業處所買賣之公司應設置薪資報酬委員會。主管機關冀望藉此規定強化經理人薪酬資訊透明度、抑制肥貓現象以及讓經理人薪資與公司經營績效連結。因此，本文分成兩部分，檢視強制設置薪酬委員會是否真能達成此預期效果？ 第一部分先探討強制設置薪酬委員是否有利於提升經理人薪酬績效敏感度，以及影響因素為何。為了檢視此研究議題，本文以臺灣上市櫃公司為研究對象，樣本期間為規定實施前後兩年(即2009年至2010年與2012年至2013年)，並將薪酬委員會的獨立性與專業能力視為強制設置薪酬委員會有效性之決定因素。其中獨立性係以現任獨立董事衡量之，專業能力則是委員的人力與社會資本，即服務董事會年資和擔任董監事家數。實證結果顯示設置薪酬委員會確實能增進經理人薪酬績效敏感度，且主要是透過薪酬委員會之獨立性與專業能力達成此功效。 第二部分探討強制設置薪酬委員會對規定實施前有超額薪資現象或較差經營績效的公司(統稱為焦點公司)是否更為有利，以及其薪酬委員會特性在此之中的作用。針對此研究議題，本文比較焦點公司與標竿公司經理人薪酬績效敏感度之差異，其中標竿公司是指規定實施前較無不合理薪資水準或有較佳經營績效的公司。實證結果顯示相較於標竿公司，規定實施後超額薪資公司薪酬績效敏感度增加幅度較大，而績效差公司卻較小。另外，現任獨立董事或擁有較多人力及社會資本的委員在不同公司會扮演著不同的角色。具體而言，當他們擔任社會大眾所關注的超額薪資公司委員時，傾向於提高薪酬績效敏感度，反之，一旦擔任績效差公司委員時，則較無此傾向。Article 14-6 of the amended Securities Exchange Act of Taiwan was passed in November of 2010 and mandated that a firm whose stock is listed on the stock exchange or traded over-the-counter shall establish a compensation committee. Regulators in Taiwan claim that this mandate can enhance the transparency of executive compensation, mitigate the “fat cat” phenomenon, and pay executives in line with firm performance and shareholder interests. Thus, this dissertation is divided into two parts to investigate whether this optimistic expectation of the regulators occurs as expected. Part I of this dissertation examines whether this mandate can benefit firms by enhancing pay-for-performance sensitivity of executive compensation as a whole and what are the channels of this mandate. To address the research questions, this dissertation uses Taiwanese-listed firms during the periods 2009 to 2010 and 2012 to 2013 as the sample. The independence and the competence of the compensation committee are considered to be the two channels which make the compensation committee mandate efficacious. The independence of the compensation committee is estimated by the compensation committee with incumbent independent directors. The competence of the compensation committee is estimated by the human and social capital of the members (i.e., long board service and multiple directorships). The empirical results show that this mandate indeed increases pay-for-performance sensitivity of executive compensation. This effect is mainly via the independence and the competence of the compensation committee. Part II of this dissertation examines the extent to which firms that previously had overpayment or poor performance (generically called focal firms) benefit from this mandate and how compensation committee composition plays a role in this benefit. To address the research questions, this dissertation compares the change in the pay-for-performance sensitivity of executive compensation between focal firms and benchmark firms. Benchmark firms were less likely to overpay or to underpay or which had good performance before the mandate. The empirical results show that, compared to benchmark firms, the positive effect of this mandate on the pay-for-performance sensitivity is larger for overpaying firms and is smaller for poor-performing firms. This dissertation also finds that compensation committee members with more human and social capital and incumbent independent directors perform diverse functions in different firms. When they serve on overpaying firms that receive public scrutiny, they are more effective at increasing pay-for-performance sensitivity. Conversely, once they serve on poor-performing firms, this function vanishes