The Relationship between Non-Executive Director Compensation and Corporate Tax Avoidance
| Autor: | Yen-Ling Cheng, 鄭妍伶 |
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| Rok vydání: | 2019 |
| Druh dokumentu: | 學位論文 ; thesis |
| Popis: | 107 This study examines the relationship between non-executive directors’ equity-based incentive compensation and corporate tax avoidance. Prior literature focuses more on the overall effect of board characteristic on corporate tax planning; however, there is little evidence on the relationship between director compensation and corporate tax avoidance. Since many companies start to modify their director compensation structure and adopt more incentive compensation, and non-executive director plays an important monitoring role in corporate governance mechanism, it is important to understand whether equity-based awards provide non-executive director incentives to improve long-term performance through tax planning. To effectively measure tax planning behavior, this study uses adjusted 3-year cash and GAAP effective tax rate as the tax planning proxies. As for major proxy, this study uses the percentage of equity-based compensation to total compensation. Using a sample of S&P 1500 companies during 2006-2015, this research finds a positive association between non-executive director equity-based incentive compensation and corporate tax avoidance. Additionally, when the companies belong to defenders under their strategy, this positive association is even stronger. Overall, the result suggests that equity-based compensation can establish the link between director and shareholder interest, and give non-executive directors more incentives to monitor long-term tax planning. This research concludes that equity-based compensation provides non-executive director incentives to affect corporate tax planning by connecting their interest with financial performance, and contributes to related literature. |
| Databáze: | Networked Digital Library of Theses & Dissertations |
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