Title: Does the board reward the top manager's social capital? Evidence from Taiwan

Authors: Chaur-Shiuh Young

Addresses: Department of Accountancy and Graduate Institute of Finance and Banking, National Cheng Kung University, No. 1, University Road, Tainan City 701, Taiwan, ROC

Abstract: Although there has been a considerable amount of research investigating the determinants of manager compensation, relatively few studies have considered the question of whether the board values a top manager|s social capital. Using a large sample of pooled data of the firms listed on the Taiwan Stock Exchange (TSE) in 2001 and 2002, this study examines the association between a top manager|s social capital, defined as external directorship ties held by the top manager, and his or her compensation after controlling for other potential factors that may affect the level of manager compensation. The empirical results show that the top manager|s social capital is an important determinant of the top manager|s pay level. Moreover, this study also finds that electronics firms and firms in traditional industries value different attributes of the top manager|s social capital.

Keywords: intellectual capital; social capital; top management; compensation; Taiwan; external directorships; manager compensation; pay levels.

DOI: 10.1504/IJLIC.2008.021012

International Journal of Learning and Intellectual Capital, 2008 Vol.5 No.3/4, pp.279 - 295

Published online: 31 Oct 2008 *

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