Compensation committee characteristics and voluntary executive compensation disclosure

ABSTRACT

Using data from Taiwan listed firms required to voluntarily disclose not only executive but also non-executive compensation adjustments, this study reveals that a higher attendance rate of compensation committee relates to a higher possibility of voluntary disclosure. In addition, our result implies that a higher meeting frequency may represent more arguments among compensation committee members in terms of determining whether or not to make such disclosures. We also find evidence implying that busy members are likely to be ceremonial and unfavourable towards compensation adjustments for non-executive employees, which might have practical implications for policy makers.

KEYWORDS:

• United Nations Sustainable Development Goals
• compensation committee characteristics
• voluntary
• disclosure

JEL CLASSIFICATION:

• G38
• J30
• J31
• J38
• M14<chg>Please check whether the inserted JEL classifications are correct

Acknowledgments

Hua-Wei Huang gratefully acknowledges the Ministry of Science and Technology, Taiwan, ROC, for support of this work under contract (Project No. MOST 107-2410-H-006 -017 -MY3).

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ In accordance with the regulations of TWSE and TPEX, respectively, since 2019 a listed company is mandatorily required to file the ‘prior year’s average salaries’ of full-time employees in non-management positions signed by a Certified Public Accountant. However, the disclosures of compensation adjustment of current year are not mandatorily required, which subsequently results in a voluntary disclosure environment for executive and non-executive.

² Due to voluntary disclosure, the variable Disc includes two classifications of Disc_Exec and Disc_NonExec.

Additional information

Funding

This work was supported by the Ministry of Science and Technology, Taiwan [MOST 107-2410-H-006 -017 -MY3].