| dc.description.abstract | This paper focuses on the relationship between the executive compensation and the firm performance of the listed companies in Taiwan in the financial crisis. Theoretically, there are two theories about executive compensation and firm performance. One is positive, and the other is negative. Most studies found that there is positive relationship between executive compensation and firm performance, but the sample periods of those studies are all in the times with good economy. Hence, I test whether the relationship between executive compensation and firm performance affected by the financial crisis which the economy is worse. This paper concentrates on 2008 financial crisis, and uses the stock return to measure the firm performance. The results show that there is no relationship between total executive compensation and the firm performance before, during and after the financial crisis. However, there is a positive relationship between the structure of the executive compensation and the firm performance during the financial crisis. Increasing the proportion of the cash compensation in total compensation (Decreasing the proportion of the equity compensation in total compensation) would enhance the stock performance. Nonetheless, the relationship between the structure of the executive compensation and the firm performance before and after the financial crisis is not obvious. Furthermore, I test the relationship between the executive compensation and the investment efficiency to find out the reason that increasing the proportion of the cash compensation could enhance the stock performance. The results demonstrate that increasing the proportion of the cash compensation in total compensation (Decreasing the proportion of the equity compensation in total compensation) would enhance the investment efficiency. Therefore, I think there is a short-term incentive effect due to increasing the proportion of cash compensation (decreasing the proportion of equity compensation). Accordingly, the investment efficiency would be enhanced, and the firm performance would be better. | en_US |