374 / 414
審計委員會權益薪酬之決定因素
374
requirements are usually chief executives or financial officers of other companies, certified
public accountants, auditors, or university professors. Except for chief executives or
financial officers of other companies (top-management members), other committee members
(non-top-management members) usually receive fixed cash salaries from their own
occupations. As for top-management members, they usually receive from their home
companies long-term incentive compensation (including stocks and options), which is tied to
a company’s future performance. By making compensation contingent on a firm’s future
performance, their compensation packages bear more uncertainty (Westphal and Zajac,
1997). Moreover, option plans effectively increase the non-tradable investment in the firm
and reduce the diversification of top-management members’ investment portfolios (Beatty
and Zajac, 1994). Harris and Raviv (1979) show that agents prefer to structure their
compensation package so that they bear less personal risk. Therefore, it is reasonable to
assume that top-management members, compared to non-top-management members, prefer
less equity-based compensation in their remuneration contracts with the company for which
they serve as audit committee members. Thus we propose our third hypothesis:
H3: Firms with a higher proportion of audit committee members who are also top
executives of other firms are less likely to grant equity-based compensation to their
audit committee members.
4. Research Methodology
4.1 Sample Selection
The sample selection process begins with 13,245 observations of U.S. publicly traded
firms in the ExecuComp database from 2006 to 2012. The sample period starts with 2006
because 2006 is the first year that “Director Compensation” in the ExecuComp database
(ExecuComp data set name: Director Compensation) provides detailed director
compensation components. Because the ExecuComp database does not provide data about
the committee membership of the specific directors, these samples are then merged with the
GMI Ratings database to determine whether a director is an audit committee member.
Additionally, we exclude firms in financial (4-digit SIC codes 6000-6999), utilities (4-digit
SIC codes 4900-4999) and government sectors (4-digit SIC codes 9900-9999) from the
sample. These firms operate in regulated environments and are usually limited in the
compensation alternatives they can offer to their employees (Fich and Shivdasani, 2005).
Observations with missing values in any variables are excluded, and extreme values of
numeric variables (top and bottom 1 percent) are winsorized. This selection process, shown