Does tunneling explain the sensitivity of executive compensation to other member firms’ performance?
研究了韩国家族控制商业集团中，高管现金薪酬如何与自身及集团其他成员企业的股票绩效挂钩，发现这种正相关关系支持了隧道效应假说，即高管因牺牲所在企业利益以惠及控制家族而获得奖励。
Abstract This study examines how executive compensation is set when a firm is a business group member. Using Korea's unique setting of family‐controlled business groups, we find that a member firm's executive cash compensation is positively linked to the stock performance of other member firms as well as its own. Further analyses reveal that this positive link is consistent with the hypothesis that corporate managers are rewarded for their decision to benefit the controlling family at the expense of the firm they manage. Specifically, we find that the sensitivity of executive pay to other member firms’ performance exists only in respect to firms in which the cash flow rights of the controlling family exceed those of the subject firm. We also find that this sensitivity is strengthened if the controlling family's control–ownership disparity in the subject firm is above the sample median.