A Study on the CEO Compensation: Focusing on the Difference between Small and Medium Business and other Firms

Jeongmi Choi   and Kyong Soo Choi

doi:10.17485/ijst/2015/v8i20/78276

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A Study on the CEO Compensation: Focusing on the Difference between Small and Medium Business and other Firms

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Indian Journal of Science and Technology

DOI: 10.17485/ijst/2015/v8i20/78276

Year: 2015, Volume: 8, Issue: 20, Pages: 1-5

Original Article

A Study on the CEO Compensation: Focusing on the Difference between Small and Medium Business and other Firms

Jeongmi Choi^1* and Kyong-Soo Choi²

¹College of Economics and Business Administration, Cheongju University, Korea; [email protected].ac.kr
² College of Business Administration, Keimyung University, Korea

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

The objective of this paper is to explore the association between small and medium business and CEO compensation for Korean listed firms. More specifically, focusing on the CEO’s cash compensation, we empirically investigate whether small and medium business exhibits different level of compensation when compared to other enterprises. We find that small and medium business exhibits lower level of CEO compensation relative to other firms. This result supports our argument that the lower degree of agency problem in small and medium business compared to other firms induces lower level of CEO compensation. Since understanding the mechanisms regarding CEO compensation directly is extremely hard, our research might provide useful information to the interested parties.
Keywords: CEO Compensation, Interested Parties, Small and Medium Business