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Korean Academic Society of Business Administration
[ Article ]
korean management review - Vol. 49, No. 1, pp.183-214
ISSN: 1226-1874 (Print)
Print publication date 29 Feb 2020
Received 22 May 2019 Revised 27 Nov 2019 Accepted 17 Dec 2019
DOI: https://doi.org/10.17287/kmr.2020.49.1.183

The Determinants of Pay-for-Performance Sensitivity and Convexity of CEO Bonus Contracts: Evidence from S&P 1500 Firms

Sewon Kwon* ; Natalie Kyung Won Kim** ; Jae Yong Shin*** ; Sun-Moon Jung****
*(First Author) Sejong University k4js1@sejong.ac.kr
**(Corresponding Author) Seoul National University midzh21@snu.ac.kr
***(Co-Author) Seoul National University jshin@snu.ac.kr
****(Co-Author) Seoul National University sunmoonj22@snu.ac.kr
최고경영자 성과급의 성과-보수 민감도 결정요인에 대한 연구: 미국 S&P 1500기업을 중심으로
권세원* ; 김경원** ; 신재용*** ; 정선문****
*세종대학교, 주저자
**서울대학교 박사과정, 교신저자
***서울대학교, 공저자
****서울대학교 박사과정, 공저자

Abstract

Recent studies have suggested that CEO’s annual bonus plans have an incentive effect comparable to stock compensation (Frydman and Jenter, 2010; Jensen and Murphy, 2011; Guay, Kepler, and Tsui, 2019). However, only a limited number of papers have addressed annual bonuses of CEOs. The aim of this paper is 1) to overview the comprehensive landscape of executive bonus plans 2) and to investigate the determinants of pay-for-performance sensitivity (hereafter, “PPS”) and the convexity in annual bonuses. We find that the 80/120% rule for target setting for annual bonus plans holds on average, with some differences across industries. We also show that firms’ growth opportunities are one of the key elements in determining bonus PPS and the convexity of bonus payouts after controlling for peer firm information and other economic factors.

초록

본 연구는 최고경영자 성과급에 대한 전반적인 특성을 분석하고 그 중에서 성과-보수 민감도(Pay-for-Performance Sensitivity, “PPS”)의 결정 요인을 집중적으로 살펴보고자 한다. 최근 연구에 따르면 최고경영자의 성과급은 주식기준 보상에 준하는 유인 효과를 지닌 것으로 나타났다(Frydman and Jenter, 2010; Jensen and Murphy, 2011; Guay, Kepler, and Tsui, 2019). 그럼에도 불구하고 최고경영자의 성과급에 대한 연구가 부족한 실정이다. 미국 S&P 1500기업의 2008년부터 2014년까지 경영자 성과급 보수계약을 분석한 결과, 산업별로 차이는 있지만, 기업들이 대체로 성과급 목표 설정에 80/120% 원칙을 사용하는 것으로 나타났다. 아울러 인접 기업(peer firms)들과 기타 경제적 요인들을 통제한 후에는 기업의 성장성이 성과급의 성과-보수 민감도(pay-for-performance sensitivity)와 성과-보수 민감도의 볼록성(convexity)의 핵심적인 결정요인으로 나타났다.

Keywords:

annual bonus plans, pay-for-performance sensitivity, convexity, executive compensation

키워드:

경영자 성과급, 성과-보수 민감도, 볼록성, 최고경영자 보상

Acknowledgments

This work was supported by the Ministry of Education of the Republic of Korea and the National Research Foundation of Korea (NRF-2018S1A5A2A02066328). Professor Jae Yong Shin acknowledges financial support from the Institute of Management Research at Seoul National University.

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• 저자 권세원은 현재 세종대학교 경영대학 회계학 전공 조교수로 재직 중이다. 서울대학교 경영학과를 졸업하고, 동 대학원에서 경영학 석사 및 박사를 취득하였으며, 공인회계사 자격 취득 후 삼일회계법인에서 약 4년가량 회계감사를 담당하였다. 주요연구분야는 경영진의 성과보상, 기업지배구조, Accrual anomaly 등이다.

• 저자 김경원은 현재 서울대학교 경영대학 경영학과 회계학 박사과정에 재학 중이다. 서울대학교 경영학과 및 동 대학원에서 경영학 석사를 취득하였으며, LG전자에서 4년 근무하였다. 주요연구분야는 경영진의 성과보상, 기업지배구조, 보상철학 등이다.

• 저자 신재용은 현재 서울대학교 경영대학 경영학과 회계학 교수로 재직 중이다. 서울대학교 경영학과를 졸업하고 동 대학원에서 석사학위를 취득하였다. 이후 KISDI에서 근무 후 미국 위스컨신 매디슨 대학교 대학원에서 경영학 박사를 취득하였다. 2010년에는 미국회계학회 관리회계분과, “가장 영향력 있는 논문상”을 수상하였으며, 2014년부터 삼일회계법인 저명교수를 역임하였다. 주요연구분야는 경영진의 성과 보상, 상대평가제도, 기업지배구조 등이다.

• 저자 정선문은 현재 서울대학교 경영대학 경영학과 회계학 박사과정에 재학중이다. 고려대학교에서 미술학사 및 경영학사를 취득하였으며, 서울대학교 경영학과에서 경영학 석사를 취득하였다. 주요 연구분야는 성과측정, 인센티브계약, 기업지배구조, 경영자보상, 정부예산 등이다.