376 / 414
審計委員會權益薪酬之決定因素
376
TAX
t
= total income taxes (Compustat data item
TXT
)
INTEXP
t
= gross interest expense on short- and long-term debt (Compustat data item
XINT
)
PFDDIV
t
= total amount of preferred dividend requirement on cumulative preferred
stock and dividends paid on noncumulative preferred stock (Compustat
data item
PDVC
)
COMDIV
t
= total dollar amount of dividends declared on common stock (Compustat
data item
CDVC
)
TA
t-1
= book value of total assets in the beginning of the fiscal year (Compustat data
item
AT
)
Opler and Titman (1993) argue that firms with higher growth prospects are less likely to
have excess free cash flow because the available cash will be spent on positive net present
value projects. Therefore, these firms have less agency conflict. On the other hand, firms
with low growth prospects are susceptible to having more agency conflict since these
companies are more likely to waste free cash flow in projects with negative net present
value. We use Tobin’s Q to proxy for growth opportunity, following the computational
procedures of Chung and Pruitt (1994):
(2)
where
MVE
t
= the product of share price and number of common shares outstanding
(Compustat data item
MKVALT
)
PS
t
= the liquidating value of outstanding preferred stock (Compustat data item
PSTKL
)
DEBT
t
= the value of short-term liabilities net of short-term assets, plus book value of
long-term debt (Compustat data item
LT
)
TA
t
= the book value of total assets (Compustat data item
AT
)
The Tobin’s Q of the firm is compared to the median of its industry (classified by
2-digit SIC codes) in that year. If the Tobin’s Q of the firm is smaller than the industry
median, the indicator
TOBIN
takes the value of 1, representing lower growth opportunity,
and the value of 0, otherwise.
Our agency conflict proxy,
FREE_TOBIN
, is the interaction between
FCF
and
TOBIN.