Compensation Structures and Firm Value.

Main Article Content

Dong Heon Byun Jinbae Kim Joon Yong Shin

Abstract

This paper studies the effects of the performance-based compensation system and the Age-Wage structure which pays lower (higher) compensation than the industry average during employees’ early (later) service periods. Previous studies show that both compensation systems have positive effects on firm value. The paper extends the results and shows the effects of the compensation systems on major factors of firm value. Empirical results using employee-wage data of Korean firms show that the Age-Wage structure contributes to firm value through the enhancement of ROA, cost reduction and an improvement in labor productivity, and the performance-based compensation system does so through sales growth. 
Keywords: wage structure, compensation, performance, firm value

Article Details

How to Cite
HEON BYUN, Dong; KIM, Jinbae; YONG SHIN, Joon. Compensation Structures and Firm Value.. Asia-Pacific Management Accounting Journal, [S.l.], v. 2, n. 1, p. 35-51, dec. 2007. ISSN 2550-1631. Available at: <http://arionline.uitm.edu.my/ojs/index.php/APMAJ/article/view/362>. Date accessed: 22 july 2018.
Section
Management Accounting