경영자 보상차이와 원가의 하방경직성

Abstract

In this study, we examine the effect of CEO pay slice (CPS) on cost stickiness. By following Bebchuk et al. (2011), we measure CPS as the CEO’s total compensation as a fraction of the combined total compensation of the top five executives. Costs are sticky if the magnitude of costs increase is bigger than the magnitude of costs decrease associated with an equivalent decrease in economic activity (Venieris et al. 2015). Bebchuk et al. (2011) and Chintrakarn et al. (2014) indicate that CPS represents the ability of a CEO to extract rents. According to the agency theory, CPS is likely to increase cost stickiness due to high agency costs. Conversely, the stewardship theory suggests that CPS is likely to reduce cost stickiness because a CEO is not an opportunistic agent, but a good steward (Donaldson and Davis 1991) acting in the best interest of shareholders by setting costs at an optimal level. Using a sample of 34,746 firm－year observations in the United States for the period 1992 to 2019, our results find a nonmonotonic relationship between CPS and cost stickiness. Specifically, relatively low CPS results in less cost stickiness. However, when CPS surpasses a certain point (approximately 45 percent of CPS), cost stickiness dramatically increases. These results are consistent when endogeneity issues are controlled by using propensity score matching regression. Finally, we find that corporate governance restructuring forced by the Global Financial Crisis mitigates the effect of CPS on cost stickiness, emphasizing the importance of implementing effective corporate governance and CEO compensation structure.