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Executive compensation, firm performance, and chaebols in Korea : Evidence from new panel data

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  • Executive compensation, firm performance, and chaebols in Korea
  • Kato, Takao; Kim, Woochan; Lee, Ju Ho
  • Institute for the Study of Labor


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Title Executive compensation, firm performance, and chaebols in Korea
Similar Titles
Sub Title

Evidence from new panel data

Material Type Reports
Author(English)

Kato, Takao; Kim, Woochan; Lee, Ju Ho

Publisher

Bonn:Institute for the Study of Labor

Date 2005-09
Series Title; No IZA Discussion Papers / 1783
Subject Country South Korea(Asia and Pacific)
Language English
File Type Link
Subject Economy < Economic Administration
Economy < Economic System
Holding Institute for the Study of Labor

Abstract

This paper provides the first rigorous econometric estimates on the pay-performance relations for executives of Korean firms with and without Chaebol affiliation. To do so, we have assembled for the first time panel data (that provide information not only on executive compensation and firm performance but also on Chaebol affiliation) for 246 firms that were included in KOSPI200 for at least two consecutive years from 1998 to 2001. Contrary to a popular belief that Korean corporate governance and the structure of Korean executive compensation is considerably different from elsewhere in the West, we find that cash compensation of Korean executives is statistically significantly related to stock market performance and that the magnitude of the sensitivity of pay to stock market performance is comparable to the U.S. and Japan. (The rest omitted)