Performance-based compensation contracts motivate managers effectively(Cheng and Indjejikian. 2009). Pay performance sensitivity means that the extent of increasing the amount of compensationas increase of firm performance. Pay performance sensitivity works to motivate manager and tocontrol manger simultaneously. Thus, to examine the difference in pay performance sensitivityaccording to the level of performance be able to give good implications to alleviate the agencyproblems between managers and shareholders. In this regard, this study investigates the differencein pay performance sensitivity according to the level of performance. This study’s sample consists of KOSPI firms belonging to non-financial companies from 2003to 2011. This study examined if there is an incentive zone in compensation system and if thereis a difference in pay performance sensitivity as the level of performance. Specifically, we testedif there is upper stickiness and lower stickiness in pay performance sensitivity. We used changein average cash compensation of directors as a proxy for compensation change and change in ROA(Return On Asset) as a proxy for performance change. We show that there are upper stickinessand lower stickiness in pay performance sensitivity. In other words, there is asymmetric payperformance sensitivity in manager compensation system of Korea firms. So far, domestic priorstudies showed that there was lower stickiness in pay performance sensitivity in managercompensation system of Korea firms. This study show that there are asymmetric pay performancesensitivity in manager compensation system of Korea firms as well as a incentive zone. Upperstickiness and lower stickiness in pay performance sensitivity are signal that there are cap andbogey in manager cash compensation system of Korea firms. In additional test, we showed that Chaebol mitigates lower stickiness in pay performance sensitivity. This result indicates thatChaebol reduces the agency cost between the head of group and professional manager. In addition,when performance is high, pay performance sensitivity due to informativeness of performancemeasure increases. When performance is low, pay performance sensitivity due to informativenessof performance measure is not changed. So far, domestic prior studies showed only lower stickiness in the pay performance sensitivity. Thus asymmetric pay performance sensitivity could be explained in part. In this paper, weshow that there are upper and lower stickiness in pay performance sensitivity thus extendedthe research about asymmetric pay performance sensitivity.