유상사급 매출인식 - yusangsageub maechul-insig

• 안건조세정보
• 안세회계법인
  • 회계법인 소개
    • 사명과 이념/ 목표와 지향
    • 성장 연혁
  • 조직구성
    • 안세전국조직
    • 소속회계사 등
    • 인재특성
  • 업무 특성
    • 서비스 제공 특징
    • 안세/안건 통합서비스
• 전문업무안내
  • 회계감사재무인증
  • 세무자문/신고대리
  • 회계자문/기장외주화
  • 재무자문/금융컨설팅
  • 경영자문/경영전략
  • 세계화 현지 자문
  • 세무/회계/경영정보서비스
  • 감사보고서/세무신고서 검토
  • 재무경영컨설팅 수행 실적
• PA 소개
  • PA 소개
• 재경 저널 및 방송
  • 주간 안세재경저널 핵심내용
    • [주간]안세재경저널
    • 최고경영재경전략
    • 긴급시사쟁점해설
    • CEO경영조언
    • 내눈에 절세미인
    • 세무회계상담자문
    • 최신판례예규엄선
    • 세정뉴스와 해설
    • 매일절세재무요점
    • 기업세무정보
    • 기업회계정보
    • 기업노무정보
    • 기업경영정보
    • 회계사 외부감사
  • 월간 세무회계경영저널
    • [월간]세계경영저널
    • 월간 이달의 특집
    • 중요법령단행본편집
    • 연말정산해설
    • 법인결산조정해설
    • 기업경영필수자료
    • 세가월령가신고서
    • 상장기업정보공시
  • 세계재경방송
    • 1.중소기업절세전략
    • 2.청년창업법인설립
    • 3.일반법인절세전략
    • 4.개인사업자절세
    • 5.급여보수판관비
    • 6.개인자산운영절세
    • 7.임직원급여보상
    • 8.주주배당경영상여
    • 9.재무경영조세전략
    • 10.가업상속증여
    • 11.차등배당과 증여
    • 12.법인세법해설
    • 13.소득세법해설
    • 14.부가가치세법
    • 15.상속증여세법
    • 16.조세특례감면법
    • 17.개정법령등 해설
    • 18.회계왕초보입문
    • 19.투명회계공익
    • 20.분식회계횡령
    • 21.중급/고급회계
    • 22.외부회계감사
    • 23.회사내경영관리
    • 24.증시 회계세금
    • 25.근로노동고용교육
    • 26.국제거래조세

최근 권호 논문

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본 연구는 최고경영진-종업원의 수직적 임금격차와 기업의 주가변동성의 상관관계에 대해 살펴본다. 기업 내 수직적 임금격차는 토너먼트 경쟁을 통해 조직 혁신을 촉진하고 성과를 향상시키는 긍정적인 측면도 있으나, 경영진과 종업원 간에 대립적인 문화를 조성하고 노사관계를 불안정하게 만들어 기업 위험을 증가시킬 가능성이 존재한다. 수직적 임금격차의 영향에 대한 선행연구들은 기업의 성과에만 초점을 맞추어 온 바, 임금격차가 주가변동성 등 기업의 위험을 증가시킬 가능성에 대한 실증분석은 희소했다. 이에 본 연구는 국내 KOSPI 상장기업의 2013-2018년 기간의 자료를 사용하여 기업의 등기임원-종업원 간의 임금격차와 주가변동성의 관계를 분석하였다. 분석 결과, 임금격차가 큰 기업일수록 주가변동성이 높은 것으로 나타나 수직적 임금격차는 기업 내부의 갈등과 불안정성을 증가시켜 주가위험을 증가시킬 수 있다는 주장을 지지하였다. 또한, 재무보고의 불투명성이 클수록, 기업지배구조가 약할수록 임금격차와 주가변동성 간의 양의 상관관계를 완화하는 것으로 나타났다. 마지막으로 수직적 임금격차가 주가폭락위험과도 양의 상관관계를 지니는 것으로 나타나, 임금격차가 기업위험에 미치는 부정적 영향을 뒷받침한다. 본 연구는 수직적 임금격차와 기업성과의 관련성을 탐구한 선행연구를 확장하여 임금격차가 클수록 주가변동성으로 대리된 주가위험이 높아질 수 있음을 보여준 데 공헌점이 있다.Recent years have seen the conflicts within companies, largely driven by the executive-employee pay disparity. Early this year, for instance, Samsung Electronics' labor union aired their grievance against their low pay compared to the skyrocketing pay for top management. Kakao's stock price crashed after the top executives exercised a large stake of their stock options. The pay disparity fuels the anti-management sentiment, because average employees are questioning the adequacy of increasing executive pays. The current study examines the association between vertical pay disparity within firm and stock price risk. Although TMT-employee pay disparity may facilitate firm innovation and improve firm performance through tournament competition, it may increase firm risk by heightening internal competition and discouraging cooperation between TMT and employees. Prior studies have focused on firm performance, while remaining relatively silent on pay disparity's effect on firm risk. We expand the literature by examining the relation between vertical pay disparity and firms' stock price risk. Drawing from a sample of firms listed in KOSPI and KOSDAQ during 2013 - 2018, we find the positive association between TMT-employee pay disparity and stock return volatility. We measure the TMT-employee pay disparity with the ratio of the average TMT pay to the average employee pay. We measure the stock return volatility by the standard deviation of weekly stock returns during the subsequent year. Our finding that TMT-employee pay disparity is positively associated with the stock volatility is consistent with our prediction that pay disparity may deepen conflicts between TMT and employees, leading to unstable firm performance and increase in stock price risk. Our findings extend our understanding about the consequences of TMT-employee pay disparity, by suggesting that vertical pay disparity not only affect the average firm performance, but also the variance of firm performance. We also examine whether the financial reporting quality moderates the relation of pay disparity and return volatility. Prior studies suggest that poor financial reporting quality can increase the information asymmetry between TMT and employees, which may further discourage their cooperation. The empirical result indicates that the positive association between pay disparity and return volatility is more pronounced with poor financial reporting quality measured by discretionary accruals. The additional test result suggests that the internal conflict between the TMT and employees may be driven by the low level of information sharing between the groups. In additional analysis, we find that TMT-employee pay disparity is also positively associated with stock price crash risk, supporting the adverse effect of internal conflicts on firm risk. It indicates that TMT-employee pay disparity increases the probability of sudden and substantial drop in stock price, above and beyond the variance of stock prices. Collectively, our study throws an important implication for board of directors who aim to enhance internal coordination and reduce the firm risk. While TMT-employee pay disparity may positively affect the firm performance through tournament incentives (as prior studies found), the disparity may deteriorate the firm operation in terms of the average performance as well as the variability of firm performance.

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본 연구는 2001년부터 2018년까지의 기간 동안 매년 말 우리나라 유가증권시장에 상장되어 있는 8,240개 기업-년의 표본에 대해, Mishkin(1983) test를 이용하여 산업이익과 기업고유이익의 지속성과 그 지속성에 대한 시장평가에 차이가 있는지를 분석하였다. 또한, 산업이익과 기업고유이익의 크기에 따라 구성된 헷지 포트폴리오를 이용하여 이익의 지속성에 대한 시장의 과소평가 여부를 추가적으로 분석하였다. 이에 더하여 생략된 변수 문제(omitted-variables problem)를 고려하는 Kraft et al.(2007) 모형을 이용하여 Mishkin test의 결과의 강건성을 확인하였다, Mishkin test를 이용한 분석 결과, Hui et al.(2016)에서와 마찬가지로 산업이익의 지속성은 기업고유이익보다 크고, 이러한 지속성의 차이를 시장은 제대로 평가하지 못하는 것으로 나타났다. 특히, 기업고유이익보다 산업이익의 지속성이 더 큼에도 불구하고 시장은 산업이익의 지속성을 기업고유이익보다 더 크게 과소평가하는 것으로 나타났다. 또한, 기업고유이익의 크기에 따라 구성한 헷지 포트폴리오의 수익률은 1년 동안의 기간에만 유의하게 양(+)의 값이지만 산업이익의 크기에 따라 구성한 헷지 포트폴리오의 수익률은 미래 3년 동안 유의하게 양(+)의 값을 보임으로써 시장은 기업고유이익에 비해 산업이익의 지속성을 더 부정확하게 인식하고 있는 것으로 나타났다. 추가적으로 정보환경에 따라 산업이익과 기업고유이익의 지속성에 대한 시장평가가 달라지는지를 분석한 결과, 산업이익과 기업고유이익의 지속성에 대한 시장평가는 예상대로 정보환경에 따라 달라지는 것으로 나타났다. 그러나 Mishkin test의 결과는 생략된 변수 문제가 있을 수 있으므로 Kraft et al.(2007) 모형을 이용하여 주식수익률에 영향을 미칠 것으로 예상되는 변수들을 포함하여 분석한 결과, 산업이익의 지속성에 대해 시장은 여전히 과소평가하는 것으로 나타났다. 그러나 기업고유이익의 지속성에 대해서는 시장이 적절하게 평가하고 있는 것으로 나타나 Mishkin test와는 다른 결과가 나타났다. 따라서 기업고유이익의 지속성에 대한 해석에는 주의가 필요하며 이 부분에 대한 보다 깊이 있는 분석은 앞으로의 연구에서 다루어져야 할 것으로 판단된다.Hui et al.(2016) separated accounting earnings into industry-wide and firm-specific earnings and examined whether there is difference in persistence between industry-wide and firm-specific earnings and whether the market recognizes the differential persistence between them. Many previous studies separated earnings into accruals and cash flows, to measure the quality of earnings, and examined their characteristics. This kind of separation of earnings is based on accrual accounting to adjust a firm's performance with accruals because the performance is biased if it is measured with cash flows. Compared with this, separating earnings into industry-wide and firm-specific earnings emphasizes the economic sources from which they are created(Hui et al., 2016). Industry-wide earnings is created from industry factors which are common to all firms in the same industry that the firm belongs to. Firm-specific earnings is created from the firm-specific factors, such as the firm's own patents and customer network and so on. The primary purpose of this paper is to analyze whether the results of Hui et al.(2016) is also observed in South Korea. It requires an empirical test because Korean financial market is different from the financial market of U.S.A. To prove it, this paper selected 8,240 firm-year observations from the firms listed on Korea Stock Exchange at the end of each calendar year for the period of 2001 to 2018. Using the sample, we investigated the persistence of industry-wide and firm-specific earnings and market pricing of them through Mishkin(1983) test and hedge portfolio based on the magnitude of industry-wide and firm-specific earnings, respectively. In addition, considering omitted variables ignored in Mishkin(1983) test, OLS of Kraft et al.(2007) was also executed. Mishkin(1983) test showed that the persistence of industry-wide earnings is larger than the persistence of firm-specific earnings and that market under-prices the persistence of industry-wide earnings more than the persistence of firm-specific earnings. This result is consistently shown in returns to hedge portfolio based on the magnitude of industry-wide and firm-specific earnings. Especially, returns to hedge portfolio based on industry-wide earnings last for three years after the hedge portfolio formation, compared to returns to hedge portfolio based on firm-specific earnings which last only for one year. The result of hedge portfolio is consistent with the higher mispricing of industry-wide earnings shown in Mishkin(1983) test. However, the result using Mishkin(1983) test is likely to be biased with omitted-variables problem, which was suggested by Kraft et al.(2007). To control for this problem, we executed OLS process provided by Kraft et al.(2007) including the variables that are expected to affect stock returns. The result showed that the persistence of industry-wide earnings is still under-priced but the persistence of firm-specific earnings is properly priced. Therefore, because the market pricing of the persistence of firm-specific earnings is different between Mishkin(1983) test and Kraft et al.(2007) model, the market pricing of firm-specific earnings should be interpreted with caution. In addition, we investigated whether the market pricing of earnings persistence is affected by the information environment, which is proxied for four alternative measures; stock price synchronicity, idiosyncratic volatility, analysts coverage, and foreign ownership. The under-pricing of industry-wide earnings is decreased with high(low) synchronicity(idiosyncracy). However, the mispricing of firm-specific earnings is enlarged with low(high) synchronicity (idiosyncracy), inconsistent with the expectation. As for the analysts coverage, though the market under-prices both industry-wide and firm-specific earnings when analysts coverage is low, the market prices industry-wide earnings properly and under-prices firm-specific earnings less when analysts coverage is high. Finally, in the case of high foreign ownership, the level of under-pricing of both industry-wide and firm-specific earnings becomes lower, which shows that foreign ownership makes market's pricing more accurate. This paper has additional implications to prior literature in that it provides another chance to investigate the role of accounting earnings through separating earnings into industry-wide earnings and firm-specific earnings. Many a study has investigated accruals and cash flows as two components of earnings, however, few studies have been concentrated on industry-wide and firm-specific earnings as components of earnings. This paper also provides an answer to the question of whether the results of Hui et al.(2016) are observed in South Korea, of which financial market is considered to be different from U.S.A. 's. In addition, this paper expands Hui et al.(2016) to show that market pricing of industry-wide and firm specific earnings is affected by information environment, proxied for stock price synchronicity, idiosyncratic volatility, analysts coverage, and foreign ownership. The effect of information environment on market pricing of industry-wide and firm-specific earnings was not dealt in Hui et al.(2016).

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본 연구는 예산을 심의하는 과정에서 각 상임위원회 소속 국회의원의 특성에 따라 예산이 변화하는지를 분석하고자 한다. 구체적으로 제18대∼제19대 국회 기관에 상임위원회별 예산의 결정 과정에 국회의원의 정책 활동 및 정치적 전문성이 반영되는지를 분석하고자 한다. 국회의원의 정책 활동 측정치로 상임위원회별 의원 발의 법률안 수, 정치적 전문성의 측정치로 상임위원회별 재선 또는 당대표 국회의원 수, 예산결산특별위원회 소속 위원 수 등을 사용하였다. 예산 결정 과정의 결과물로 전년 대비 위원회별 예산변동, 위원회별 정부 예산안 대비 국회의 수정예산안 변동, 전년 전체예산 대비 위원회별 예산 비중의 변화를 사용하여 분석하였다. 예산을 심의하는 과정에서 상임위원회가 역할을 충실히 한다면, 전문적인 논의를 바탕으로 예산안을 심사할 것이므로 해당 효과가 예산 결정에 영향을 미칠 것으로 기대하였다. 분석 결과 상임위원회 소속 국회의원의 활발한 정책 활동 또는 정치적 전문성이 전년대비 위원회별 예산, 정부 예산안 대비 국회 승인예산 및 전년 대비 위원회별 예산분배 비중이 변화에 각기 다르게 작용하는 것으로 나타났다. 본 연구는 국회의원의 정책 활동 및 정치적 전문성이 존재하는 경우 해당 위원회 소속 부처의 예산 변화가 나타나 예산심사자로서 상임위원회의 역할을 실증적 분석했다는 시사점이 있다.This study focuses on the role of a member of the national assembly in the process of reviewing the budget proposal and analyzes whether the budgets are changed according to the characteristics of the belonging to each standing committee in reviewing the budget. The Budgetary Process is a series of procedures in which expenses for government activities are specifically set, approved by the parliament, executed, and audited. The budget process generally consists of four processes: budget preparation, budget deliberation and resolution, budget execution, settlement of accounts, and accounting inspection. The budget process is a series of processes for managing national life, and the budget appears as a result of the strategies and interactions of decision-making groups in the budget decision process. In the budget preparation process, the role of the government in submitting the budget is important, but in the process of deliberation of the budget, the role of the National Assembly members and the central budget agency is important. Article 54 (1) of the Constitution stipulates that “The National Assembly deliberates and finalizes the national budget.” Specifically, we analyze whether the policy activities and political expertise of the member of the national assembly are reflected in the decision process of the budget for each standing committee based on the budget proposal during the term of the 18th∼19th National Assembly. Preliminary examination of the standing committee plays a role in enhancing the professionalism of the subject of deliberation by field, expanding the scope of public opinion gathering, dispersing the deliberation right and increasing the suitability for democratic decision-making by expanding the participation of lawmakers. Although the settlement of accounts including financial statements in the domestic budget decision process is based on an accrual basis, the revenue and expenditure budget is based on a cash basis, and there is room for agency problems that occur in the process of budgeting the government. Policy activities and political expertise are used as measures of the role of members of the National Assembly, and the result of the budget decision process is the change in the budget by committee compared to the previous year, the change in the revised budget of the National Assembly compared to the government budget by each committee, and the change in the proportion of the budget by each committee compared to the total budget of the previous year. The outcome of the budget decision process was analyzed using changes in the amount of the budget by committee compared with the previous year, changes in the National Assembly's revised budget against the government's budget bill and changes in the proportion of the budget by committee's total budget over the previous year. As a result of the analysis, the budget was changed according to active policy activities or political expertise of the members of the standing committee. Specifically, it was found that the higher the number of bills proposed by lawmakers by standing committee and the higher the ratio of bills passed, the higher the budget or the proportion of budget distribution increased compared to the previous year. This means that the more active the policy activities of the National Assembly, the more effective the budget increase is. In addition, as the number of bills proposed by lawmakers per standing committee increases, the budget decreases compared to government proposals, suggesting that the role of lawmakers according to policy activities in the budget deliberation process is acting as a result of budget cuts. On the other hand, as the number of party representatives of the members of each standing committee increased, and the number of members of the special committee on budget settlement by standing committee increased, political expertise increased. This suggests that the political expertise of the National Assembly members is working effectively in reducing the budget compared to the previous year. The contribution of this study is that it was verified whether or not the members of the National Assembly are faithfully fulfilling their obligations to the budget decision authority given by the Constitution, focusing on the political expertise and control variables established in the study. This will be of great help in setting up a system to verify the performance of parliamentary activities in the future. The purpose of this study is to analyze the effect of the characteristics of members of the National Assembly on budget control during the central government budget decision process. Due to the limitations of data collection, there is a limitation in not being able to distinguish and measure the professional characteristics of members of the National Assembly. If sufficient data are accumulated in the future, it is expected that various hypotheses reflecting the expertise of lawmakers and related research will proceed.

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최근 각 분야에서 기업의 ESG(환경·사회·지배구조) 활동에 대한 관심 확대와 책임투자(SRI)에 대한 인식 강화와 더불어 ESG를 수행하는 기업으로 글로벌 자금 이동이 증가하고 있다. 이에 본 연구는 기업의 조세혜택을 조절효과로 반영하여 기업의 ESG 수준이 외국인 지분율에 미치는 영향에 대해서 실증분석하였다. 표본은 2012년부터 2019년까지 유가증권상장기업 중 12월 말 결산법인(금융업 제외) 5,097개 기업을 대상으로 분석하였다. 분석결과는 다음과 같다. 첫째, 기업의 ESG 수준이 높을수록 외국인 지분율 증가에 긍정적인 영향을 미치는 것으로 나타났다. 둘째, 조세혜택의 조절효과를 살펴본 결과 외국인 투자자는 기업의 조세혜택과 ESG 수준이 높은 기업에 긍정적인 투자의사결정을 하는 것으로 나타났다. 또한 분석결과의 신뢰성을 높이기 위해 기업의 조세혜택 변화에 따른 기업의 ESG 수준의 변화가 외국인 지분율 변화에 미치는 영향에 대해 추가분석한 결과, 기본분석과 동일한 결과가 도출되어 연구가설을 지지하는 것으로 나타났다. 본 연구결과는 외국인 투자자들이 조세혜택이 높고 ESG 등급이 높은 기업에 투자를 선호하며, 기업의 ESG 수준의 증가는 외국인 지분율에 긍정적인 영향을 미치고 있음을 보여주고 있다. 이러한 분석결과는 다음과 같은 공헌점 및 시사점을 제공해줄 수 있다. 첫째, 학문적 측면에서 본 연구는 외국인 투자자와 관련된 연구에서 조세혜택 및 ESG 수준이 높은 기업에 대한 외국인의 투자선호가 일시적이 아닌 장기적인 투자요소로 고려될 수 있음을 제시해 주고 있다. 둘째, 기업입장에서는 조세혜택이 높고 ESG 수준이 높을수록 외국인 투자유치를 긍정적으로 이끌어낼 수 있음을 보여주고 있다. 셋째, 규제당국 입장에서는 본 연구결과를 통해 기업의 ESG 정보에 관한 공시 강화 및 의무화를 위한 근거자료, 즉 기업의 ESG 강화를 독려하기 위한 수단으로 세제혜택, 상장혜택 등에 이를 반영할 수 있는 근거자료로 적극적으로 활용할 수 있다. 마지막으로 국내·외 투자자 입장에서는 기업 투자요소 고려 시, 기업의 ESG 수준과 조세혜택이 높은 기업을 투자처로 선택함으로써 투자의사결정의 유용한 정보로 활용할 수 있을 것으로 기대된다.In this study, considering that global funds are shifting to ESG-managed companies and strengthening the awareness of sound corporate management and socially responsible investment (SRI) in relation to ESG (environmental, social, and governance) in each field, We analyze the effect of the ESG level of a company on the foreign investment according to the tax benefits. The final sample selection was analyzed for 5,097 companies with a settlement of December 31(excluding the financial industry) among companies listed on securities from 2012 to 2019 based on the fiscal year. This study tests the hypothesis that the relationship between a company's ESG level and foreign investment in that company differs depending on tax benefits. As a result of regression analysis, it was found that a higher ESG level of a company has a positive effect on the foreign ownership ratio, and that foreign investors make positive decisions about companies with high corporate tax benefits a nd ESG l evel s. In addition, in order to increase the reliability of the empirical analysis of this study, as a result of additional analysis on the effect of changes in the corporate ESG level according to the increase or decrease of corporate tax benefits on the change in the foreign ownership ratio, the hypothesis was accepted. Summarizing the above research results, it can be interpreted that foreign investors prefer to invest in companies with high ESG levels, and this effect is more significant in companies with high tax benefits. In other words, the results of this study suggest that foreign investors consider a company's ESG level as an investment decision-making index, and show that a company's ESG level and tax benefits have a positive effect on foreign investors' investment decision-making. It is expected that the results of this study can be used as meaningful information in various aspects. First, from an academic point of view, this study confirms that higher corporate tax benefits and ESG levels have a positive effect on foreign investors. In particular, in studies related to foreign investors, it should be noted that foreign investors' preference for investment in companies with high tax benefits and ESG levels is considered as a long-term investment factor rather than a temporary investment factor. Second, from the point of view of foreign investors, it shows that companies with higher tax benefits and higher ESG levels can positively attract foreign investment. In addition, from the perspective of regulatory authorities(Financial Services Commission, The Ministry of Economy and Finance, the Korea Exchange(KRX), etc.), the results of this study can be used as evidence for strengthening and mandatory disclosure of ESG information. In other words, the contribution of this study exists in that it can be used as evidence to reflect tax benefits and listing benefits as a means to encourage companies to strengthen ESG activities. Finally, it is expected that domestic and foreign investors will be able to use this information as useful information in making investment decisions by selecting companies with high ESG levels and tax benefits when considering corporate investment factors. On the other hand, the limitations of this study are as follows. First, this study presented the results that the company's ESG level and tax benefits have a significant effect on the foreign ownership ratio targeting KOSPI listed companies, but KOSDAQ listed companies were not included in the study. It is necessary to analyze the effects that may appear in various markets including KOSDAQ listed companies in the future. Second, although this study extended the foreign investment period to two years, It is necessary to further extend the investment period to verify longer-term investment decisions. In other words, if the sample is expanded to KOSDAQ listed companies and the period of foreign investment is extended, it is expected that additional meaningful implications will be provided.

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최근 지속가능성 이슈를 해결하고 지속가능 성과를 향상시키기 위한 핵심요소로 지속가능 리더십에 대한 중요성이 최근 강조되고 있다. 그러나 지속가능 리더십과 관련된 선행연구들은 대부분 이론적 또는 사례연구였으며, 몇몇 실증연구들은 지속가능 성과를 고려하지 못하였다. 한편, 최근 관리회계 문헌에서는 지속가능 경영과 관련하여 SPMS의 이용을 강조하고 있다. 그러나 SPMS에 관한 실증연구는 거의 없으며, SPMS의 이용방식에 대한 시각은 매우 제한적이다. 이러한 문제점을 해결하고자 최근 연구들은 PMS의 새로운 이용방식개념으로 이용강도를 강조하고 있다. 따라서 선행연구의 한계점을 바탕으로 본 연구는 최근 경영패러다임인 지속가능경영을 고려하여 지속가능 리더십, SPMS의 이용강도, 그리고 지속가능 성과 간의 관계를 실증적으로 분석하였으며, 그 결과는 다음과 같다. 첫째, 지속가능 리더십은 지속가능 성과에 1% 유의수준에서 유의적인 정(+)의 영향을 미치는 것으로 나타났다. 둘째, 지속가능 리더십은 SPMS의 이용강도에 1% 유의수준에서 유의적인 정(+)의 영향을 미치는 것으로 나타났다. 셋째, SPMS의 이용강도는 지속가능 성과에 1% 유의수준에서 유의적인 정(+)의 영향을 미치는 것으로 나타났다. 넷째, 지속가능 리더섭과 지속가능 성과 간의 관계에서 SPMS의 이용강도의 매개역할을 확인하였다. 본 연구의 나타난 결과에 대한 의의 및 시사점은 다음과 같다. 첫째, 본 연구에서는 지속가능경영과 관련하여 관리회계 측면에서 실증연구를 수행하여 그 후속 연구의 토대를 마련한 것이 하나의 공헌점이다. 즉 관리회계 분야에서는 경영자의 리더십에 관한 실증연구가 많이 부족하였으나, 본 연구는 최근 이슈가 되고 있는 지속가능 리더십으로 그 영역을 확장하였다. 또한 기존의 PMS에 지속가능성을 통합한 개념인 SPMS의 이론적 연구를 바탕으로 실증연구를 수행함으로써 PMS 관련 연구영역을 확장하였다. 둘째, 본 연구는 지속가능 리더십은 지속가능 성과를 개선시키는 것으로 나타나 최근의 지속가능경영과 관련하여 다양한 이해관계자들의 요구사항을 만족시키면서 기업의 지속가능 성과를 개선시키기 위해서는 경영자들은 지속가능 리더십을 강화시킬 필요성에 대해 실무적인 시사점을 제공해준다. 셋째, SPMS의 이용방식으로 최근 제안되고 있는 Spekle et al.(2017)의 이용강도를 고려하여 연구를 수행함으로써, 기존의 PMS 이용방식의 개별적인 사용에 대한 혼재된 연구결과의 한계점에 대한 새로운 시각과 해석을 제공한다는데 의의가 있다. 따라서 본 연구에서는 최근의 경영환경에 요구되는 지속가능 리더십과 지속가능 성과 간의 관계에서 SPMS 이용강도의 역할을 실증분석함으로써 기존 선행연구의 한계점을 극복하고 최근의 경영환경에 필요한 경영자의 능력 및 역할은 무엇이며, 이러한 경영자는 지속가능성을 해결하기 위해 기존의 시스템을 어떻게 구축 및 이용해야 성과를 창출시킬 수 있는지에 대한 실무적인 개선방안을 제시하는데 기여를 할 것으로 판단된다. 이 같은 분석은 기업이 지속가능 경영활동을 통한 성과를 달성 및 향상시키기 위한 핵심요인으로 기업에 주요한 영향을 미치는 경영자의 리더십과 조직의 내부 프로세스에서 찾고 해석하려 한다는데 의의가 있다.Recently, the importance of sustainability leadership has been increased as a key factor in solving sustainability issues and improving sustainability performance. However, most of the prior studies on sustainability leadership are theoretical research or case studies, and most empirical studies do not take into account sustainability performance. Meanwhile, the recent management accounting literature emphasizes the use of SPMS in relation to sustainability management. However, there are few empirical studies on SPMS, and the scope of the research on how to use SPMS has been very limited. Thus, recent studies have started to consider the intensity of PMS usage as a new factor in the research on sustainability management. Therefore, this study empirically analyzes the relationships among sustainability leadership, intensity of SPMS usage, and sustainability performance to provide meaningful implications for sustainability management, which is a recent management paradigm. We first find that sustainability leadership has a significant positive (+) effect on sustainability performance at the 1% level. Second, it is found that sustainability leadership has a significant positive (+) effect on the intensity of SPMS usage at the 1% level. Third, it is also found that the intensity of SPMS usage has a significant positive (+) effect on sustainability performance at the 1% level. Lastly, the mediating role of the intensity of SPMS usage is confirmed in the relationship between sustainability leadership and sustainability performance. The contributions and implications of this study are as follows. First, an empirical study on sustainability management is conducted from the perspective of management accounting, which can be a foundation for subsequent management accounting research on sustainability. While there has been scant empirical research on managerial leadership in the field of management accounting, this study expands research scope of management accounting to sustainability leadership. In addition, the PMS-related research area is expanded by conducting an empirical study based on the theoretical research on SPMS, a concept that integrates sustainability into the existing PMS. Second, this study shows that sustainability leadership improves sustainability performance, providing practical implications that managers need to strengthen sustainability leadership in order to improve corporate sustainability while satisfying the requirements of various stakeholders. Third, by conducting a study in consideration of the intensity of SPMS usage suggested by Spekle et al.(2017), this study provides a new perspective and interpretation on the mixed results of prior studies on individual use of existing PMS methods. That is, this study empirically analyzes the role of intensity of SPMS usage in the relationship between sustainability leadership and sustainability performance required in the recent business environment to overcome the limitations of prior studies and contribute to present practical improvement measures. This analysis is meaningful in that when a company seeks to find a key factor for improving performance through sustainability management activities, it considers the leadership of managers and internal processes of the organization, which have a major impact on the company.

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Recent years have seen the conflicts within companies, largely driven by the executive-employee pay disparity. Early this year, for instance, Samsung Electronics' labor union aired their grievance against their low pay compared to the skyrocketing pay for top management. Kakao's stock price crashed after the top executives exercised a large stake of their stock options. The pay disparity fuels the anti-management sentiment, because average employees are questioning the adequacy of increasing executive pays. The current study examines the association between vertical pay disparity within firm and stock price risk. Although TMT-employee pay disparity may facilitate firm innovation and improve firm performance through tournament competition, it may increase firm risk by heightening internal competition and discouraging cooperation between TMT and employees. Prior studies have focused on firm performance, while remaining relatively silent on pay disparity's effect on firm risk. We expand the literature by examining the relation between vertical pay disparity and firms' stock price risk. Drawing from a sample of firms listed in KOSPI and KOSDAQ during 2013 - 2018, we find the positive association between TMT-employee pay disparity and stock return volatility. We measure the TMT-employee pay disparity with the ratio of the average TMT pay to the average employee pay. We measure the stock return volatility by the standard deviation of weekly stock returns during the subsequent year. Our finding that TMT-employee pay disparity is positively associated with the stock volatility is consistent with our prediction that pay disparity may deepen conflicts between TMT and employees, leading to unstable firm performance and increase in stock price risk. Our findings extend our understanding about the consequences of TMT-employee pay disparity, by suggesting that vertical pay disparity not only affect the average firm performance, but also the variance of firm performance. We also examine whether the financial reporting quality moderates the relation of pay disparity and return volatility. Prior studies suggest that poor financial reporting quality can increase the information asymmetry between TMT and employees, which may further discourage their cooperation. The empirical result indicates that the positive association between pay disparity and return volatility is more pronounced with poor financial reporting quality measured by discretionary accruals. The additional test result suggests that the internal conflict between the TMT and employees may be driven by the low level of information sharing between the groups. In additional analysis, we find that TMT-employee pay disparity is also positively associated with stock price crash risk, supporting the adverse effect of internal conflicts on firm risk. It indicates that TMT-employee pay disparity increases the probability of sudden and substantial drop in stock price, above and beyond the variance of stock prices. Collectively, our study throws an important implication for board of directors who aim to enhance internal coordination and reduce the firm risk. While TMT-employee pay disparity may positively affect the firm performance through tournament incentives (as prior studies found), the disparity may deteriorate the firm operation in terms of the average performance as well as the variability of firm performance.0Recent years have seen the conflicts within companies, largely driven by the executive-employee pay disparity. Early this year, for instance, Samsung Electronics' labor union aired their grievance against their low pay compared to the skyrocketing pay for top management. Kakao's stock price crashed after the top executives exercised a large stake of their stock options. The pay disparity fuels the anti-management sentiment, because average employees are questioning the adequacy of increasing executive pays. The current study examines the association between vertical pay disparity within firm and stock price risk. Although TMT-employee pay disparity may facilitate firm innovation and improve firm performance through tournament competition, it may increase firm risk by heightening internal competition and discouraging cooperation between TMT and employees. Prior studies have focused on firm performance, while remaining relatively silent on pay disparity's effect on firm risk. We expand the literature by examining the relation between vertical pay disparity and firms' stock price risk. Drawing from a sample of firms listed in KOSPI and KOSDAQ during 2013 - 2018, we find the positive association between TMT-employee pay disparity and stock return volatility. We measure the TMT-employee pay disparity with the ratio of the average TMT pay to the average employee pay. We measure the stock return volatility by the standard deviation of weekly stock returns during the subsequent year. Our finding that TMT-employee pay disparity is positively associated with the stock volatility is consistent with our prediction that pay disparity may deepen conflicts between TMT and employees, leading to unstable firm performance and increase in stock price risk. Our findings extend our understanding about the consequences of TMT-employee pay disparity, by suggesting that vertical pay disparity not only affect the average firm performance, but also the variance of firm performance. We also examine whether the financial reporting quality moderates the relation of pay disparity and return volatility. Prior studies suggest that poor financial reporting quality can increase the information asymmetry between TMT and employees, which may further discourage their cooperation. The empirical result indicates that the positive association between pay disparity and return volatility is more pronounced with poor financial reporting quality measured by discretionary accruals. The additional test result suggests that the internal conflict between the TMT and employees may be driven by the low level of information sharing between the groups. In additional analysis, we find that TMT-employee pay disparity is also positively associated with stock price crash risk, supporting the adverse effect of internal conflicts on firm risk. It indicates that TMT-employee pay disparity increases the probability of sudden and substantial drop in stock price, above and beyond the variance of stock prices. Collectively, our study throws an important implication for board of directors who aim to enhance internal coordination and reduce the firm risk. While TMT-employee pay disparity may positively affect the firm performance through tournament incentives (as prior studies found), the disparity may deteriorate the firm operation in terms of the average performance as well as the variability of firm performance.1

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Recent years have seen the conflicts within companies, largely driven by the executive-employee pay disparity. Early this year, for instance, Samsung Electronics' labor union aired their grievance against their low pay compared to the skyrocketing pay for top management. Kakao's stock price crashed after the top executives exercised a large stake of their stock options. The pay disparity fuels the anti-management sentiment, because average employees are questioning the adequacy of increasing executive pays. The current study examines the association between vertical pay disparity within firm and stock price risk. Although TMT-employee pay disparity may facilitate firm innovation and improve firm performance through tournament competition, it may increase firm risk by heightening internal competition and discouraging cooperation between TMT and employees. Prior studies have focused on firm performance, while remaining relatively silent on pay disparity's effect on firm risk. We expand the literature by examining the relation between vertical pay disparity and firms' stock price risk. Drawing from a sample of firms listed in KOSPI and KOSDAQ during 2013 - 2018, we find the positive association between TMT-employee pay disparity and stock return volatility. We measure the TMT-employee pay disparity with the ratio of the average TMT pay to the average employee pay. We measure the stock return volatility by the standard deviation of weekly stock returns during the subsequent year. Our finding that TMT-employee pay disparity is positively associated with the stock volatility is consistent with our prediction that pay disparity may deepen conflicts between TMT and employees, leading to unstable firm performance and increase in stock price risk. Our findings extend our understanding about the consequences of TMT-employee pay disparity, by suggesting that vertical pay disparity not only affect the average firm performance, but also the variance of firm performance. We also examine whether the financial reporting quality moderates the relation of pay disparity and return volatility. Prior studies suggest that poor financial reporting quality can increase the information asymmetry between TMT and employees, which may further discourage their cooperation. The empirical result indicates that the positive association between pay disparity and return volatility is more pronounced with poor financial reporting quality measured by discretionary accruals. The additional test result suggests that the internal conflict between the TMT and employees may be driven by the low level of information sharing between the groups. In additional analysis, we find that TMT-employee pay disparity is also positively associated with stock price crash risk, supporting the adverse effect of internal conflicts on firm risk. It indicates that TMT-employee pay disparity increases the probability of sudden and substantial drop in stock price, above and beyond the variance of stock prices. Collectively, our study throws an important implication for board of directors who aim to enhance internal coordination and reduce the firm risk. While TMT-employee pay disparity may positively affect the firm performance through tournament incentives (as prior studies found), the disparity may deteriorate the firm operation in terms of the average performance as well as the variability of firm performance.2Recent years have seen the conflicts within companies, largely driven by the executive-employee pay disparity. Early this year, for instance, Samsung Electronics' labor union aired their grievance against their low pay compared to the skyrocketing pay for top management. Kakao's stock price crashed after the top executives exercised a large stake of their stock options. The pay disparity fuels the anti-management sentiment, because average employees are questioning the adequacy of increasing executive pays. The current study examines the association between vertical pay disparity within firm and stock price risk. Although TMT-employee pay disparity may facilitate firm innovation and improve firm performance through tournament competition, it may increase firm risk by heightening internal competition and discouraging cooperation between TMT and employees. Prior studies have focused on firm performance, while remaining relatively silent on pay disparity's effect on firm risk. We expand the literature by examining the relation between vertical pay disparity and firms' stock price risk. Drawing from a sample of firms listed in KOSPI and KOSDAQ during 2013 - 2018, we find the positive association between TMT-employee pay disparity and stock return volatility. We measure the TMT-employee pay disparity with the ratio of the average TMT pay to the average employee pay. We measure the stock return volatility by the standard deviation of weekly stock returns during the subsequent year. Our finding that TMT-employee pay disparity is positively associated with the stock volatility is consistent with our prediction that pay disparity may deepen conflicts between TMT and employees, leading to unstable firm performance and increase in stock price risk. Our findings extend our understanding about the consequences of TMT-employee pay disparity, by suggesting that vertical pay disparity not only affect the average firm performance, but also the variance of firm performance. We also examine whether the financial reporting quality moderates the relation of pay disparity and return volatility. Prior studies suggest that poor financial reporting quality can increase the information asymmetry between TMT and employees, which may further discourage their cooperation. The empirical result indicates that the positive association between pay disparity and return volatility is more pronounced with poor financial reporting quality measured by discretionary accruals. The additional test result suggests that the internal conflict between the TMT and employees may be driven by the low level of information sharing between the groups. In additional analysis, we find that TMT-employee pay disparity is also positively associated with stock price crash risk, supporting the adverse effect of internal conflicts on firm risk. It indicates that TMT-employee pay disparity increases the probability of sudden and substantial drop in stock price, above and beyond the variance of stock prices. Collectively, our study throws an important implication for board of directors who aim to enhance internal coordination and reduce the firm risk. While TMT-employee pay disparity may positively affect the firm performance through tournament incentives (as prior studies found), the disparity may deteriorate the firm operation in terms of the average performance as well as the variability of firm performance.3

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Recent years have seen the conflicts within companies, largely driven by the executive-employee pay disparity. Early this year, for instance, Samsung Electronics' labor union aired their grievance against their low pay compared to the skyrocketing pay for top management. Kakao's stock price crashed after the top executives exercised a large stake of their stock options. The pay disparity fuels the anti-management sentiment, because average employees are questioning the adequacy of increasing executive pays. The current study examines the association between vertical pay disparity within firm and stock price risk. Although TMT-employee pay disparity may facilitate firm innovation and improve firm performance through tournament competition, it may increase firm risk by heightening internal competition and discouraging cooperation between TMT and employees. Prior studies have focused on firm performance, while remaining relatively silent on pay disparity's effect on firm risk. We expand the literature by examining the relation between vertical pay disparity and firms' stock price risk. Drawing from a sample of firms listed in KOSPI and KOSDAQ during 2013 - 2018, we find the positive association between TMT-employee pay disparity and stock return volatility. We measure the TMT-employee pay disparity with the ratio of the average TMT pay to the average employee pay. We measure the stock return volatility by the standard deviation of weekly stock returns during the subsequent year. Our finding that TMT-employee pay disparity is positively associated with the stock volatility is consistent with our prediction that pay disparity may deepen conflicts between TMT and employees, leading to unstable firm performance and increase in stock price risk. Our findings extend our understanding about the consequences of TMT-employee pay disparity, by suggesting that vertical pay disparity not only affect the average firm performance, but also the variance of firm performance. We also examine whether the financial reporting quality moderates the relation of pay disparity and return volatility. Prior studies suggest that poor financial reporting quality can increase the information asymmetry between TMT and employees, which may further discourage their cooperation. The empirical result indicates that the positive association between pay disparity and return volatility is more pronounced with poor financial reporting quality measured by discretionary accruals. The additional test result suggests that the internal conflict between the TMT and employees may be driven by the low level of information sharing between the groups. In additional analysis, we find that TMT-employee pay disparity is also positively associated with stock price crash risk, supporting the adverse effect of internal conflicts on firm risk. It indicates that TMT-employee pay disparity increases the probability of sudden and substantial drop in stock price, above and beyond the variance of stock prices. Collectively, our study throws an important implication for board of directors who aim to enhance internal coordination and reduce the firm risk. While TMT-employee pay disparity may positively affect the firm performance through tournament incentives (as prior studies found), the disparity may deteriorate the firm operation in terms of the average performance as well as the variability of firm performance.4

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Recent years have seen the conflicts within companies, largely driven by the executive-employee pay disparity. Early this year, for instance, Samsung Electronics' labor union aired their grievance against their low pay compared to the skyrocketing pay for top management. Kakao's stock price crashed after the top executives exercised a large stake of their stock options. The pay disparity fuels the anti-management sentiment, because average employees are questioning the adequacy of increasing executive pays. The current study examines the association between vertical pay disparity within firm and stock price risk. Although TMT-employee pay disparity may facilitate firm innovation and improve firm performance through tournament competition, it may increase firm risk by heightening internal competition and discouraging cooperation between TMT and employees. Prior studies have focused on firm performance, while remaining relatively silent on pay disparity's effect on firm risk. We expand the literature by examining the relation between vertical pay disparity and firms' stock price risk. Drawing from a sample of firms listed in KOSPI and KOSDAQ during 2013 - 2018, we find the positive association between TMT-employee pay disparity and stock return volatility. We measure the TMT-employee pay disparity with the ratio of the average TMT pay to the average employee pay. We measure the stock return volatility by the standard deviation of weekly stock returns during the subsequent year. Our finding that TMT-employee pay disparity is positively associated with the stock volatility is consistent with our prediction that pay disparity may deepen conflicts between TMT and employees, leading to unstable firm performance and increase in stock price risk. Our findings extend our understanding about the consequences of TMT-employee pay disparity, by suggesting that vertical pay disparity not only affect the average firm performance, but also the variance of firm performance. We also examine whether the financial reporting quality moderates the relation of pay disparity and return volatility. Prior studies suggest that poor financial reporting quality can increase the information asymmetry between TMT and employees, which may further discourage their cooperation. The empirical result indicates that the positive association between pay disparity and return volatility is more pronounced with poor financial reporting quality measured by discretionary accruals. The additional test result suggests that the internal conflict between the TMT and employees may be driven by the low level of information sharing between the groups. In additional analysis, we find that TMT-employee pay disparity is also positively associated with stock price crash risk, supporting the adverse effect of internal conflicts on firm risk. It indicates that TMT-employee pay disparity increases the probability of sudden and substantial drop in stock price, above and beyond the variance of stock prices. Collectively, our study throws an important implication for board of directors who aim to enhance internal coordination and reduce the firm risk. While TMT-employee pay disparity may positively affect the firm performance through tournament incentives (as prior studies found), the disparity may deteriorate the firm operation in terms of the average performance as well as the variability of firm performance.5Recent years have seen the conflicts within companies, largely driven by the executive-employee pay disparity. Early this year, for instance, Samsung Electronics' labor union aired their grievance against their low pay compared to the skyrocketing pay for top management. Kakao's stock price crashed after the top executives exercised a large stake of their stock options. The pay disparity fuels the anti-management sentiment, because average employees are questioning the adequacy of increasing executive pays. The current study examines the association between vertical pay disparity within firm and stock price risk. Although TMT-employee pay disparity may facilitate firm innovation and improve firm performance through tournament competition, it may increase firm risk by heightening internal competition and discouraging cooperation between TMT and employees. Prior studies have focused on firm performance, while remaining relatively silent on pay disparity's effect on firm risk. We expand the literature by examining the relation between vertical pay disparity and firms' stock price risk. Drawing from a sample of firms listed in KOSPI and KOSDAQ during 2013 - 2018, we find the positive association between TMT-employee pay disparity and stock return volatility. We measure the TMT-employee pay disparity with the ratio of the average TMT pay to the average employee pay. We measure the stock return volatility by the standard deviation of weekly stock returns during the subsequent year. Our finding that TMT-employee pay disparity is positively associated with the stock volatility is consistent with our prediction that pay disparity may deepen conflicts between TMT and employees, leading to unstable firm performance and increase in stock price risk. Our findings extend our understanding about the consequences of TMT-employee pay disparity, by suggesting that vertical pay disparity not only affect the average firm performance, but also the variance of firm performance. We also examine whether the financial reporting quality moderates the relation of pay disparity and return volatility. Prior studies suggest that poor financial reporting quality can increase the information asymmetry between TMT and employees, which may further discourage their cooperation. The empirical result indicates that the positive association between pay disparity and return volatility is more pronounced with poor financial reporting quality measured by discretionary accruals. The additional test result suggests that the internal conflict between the TMT and employees may be driven by the low level of information sharing between the groups. In additional analysis, we find that TMT-employee pay disparity is also positively associated with stock price crash risk, supporting the adverse effect of internal conflicts on firm risk. It indicates that TMT-employee pay disparity increases the probability of sudden and substantial drop in stock price, above and beyond the variance of stock prices. Collectively, our study throws an important implication for board of directors who aim to enhance internal coordination and reduce the firm risk. While TMT-employee pay disparity may positively affect the firm performance through tournament incentives (as prior studies found), the disparity may deteriorate the firm operation in terms of the average performance as well as the variability of firm performance.6

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초록보기

Recent years have seen the conflicts within companies, largely driven by the executive-employee pay disparity. Early this year, for instance, Samsung Electronics' labor union aired their grievance against their low pay compared to the skyrocketing pay for top management. Kakao's stock price crashed after the top executives exercised a large stake of their stock options. The pay disparity fuels the anti-management sentiment, because average employees are questioning the adequacy of increasing executive pays. The current study examines the association between vertical pay disparity within firm and stock price risk. Although TMT-employee pay disparity may facilitate firm innovation and improve firm performance through tournament competition, it may increase firm risk by heightening internal competition and discouraging cooperation between TMT and employees. Prior studies have focused on firm performance, while remaining relatively silent on pay disparity's effect on firm risk. We expand the literature by examining the relation between vertical pay disparity and firms' stock price risk. Drawing from a sample of firms listed in KOSPI and KOSDAQ during 2013 - 2018, we find the positive association between TMT-employee pay disparity and stock return volatility. We measure the TMT-employee pay disparity with the ratio of the average TMT pay to the average employee pay. We measure the stock return volatility by the standard deviation of weekly stock returns during the subsequent year. Our finding that TMT-employee pay disparity is positively associated with the stock volatility is consistent with our prediction that pay disparity may deepen conflicts between TMT and employees, leading to unstable firm performance and increase in stock price risk. Our findings extend our understanding about the consequences of TMT-employee pay disparity, by suggesting that vertical pay disparity not only affect the average firm performance, but also the variance of firm performance. We also examine whether the financial reporting quality moderates the relation of pay disparity and return volatility. Prior studies suggest that poor financial reporting quality can increase the information asymmetry between TMT and employees, which may further discourage their cooperation. The empirical result indicates that the positive association between pay disparity and return volatility is more pronounced with poor financial reporting quality measured by discretionary accruals. The additional test result suggests that the internal conflict between the TMT and employees may be driven by the low level of information sharing between the groups. In additional analysis, we find that TMT-employee pay disparity is also positively associated with stock price crash risk, supporting the adverse effect of internal conflicts on firm risk. It indicates that TMT-employee pay disparity increases the probability of sudden and substantial drop in stock price, above and beyond the variance of stock prices. Collectively, our study throws an important implication for board of directors who aim to enhance internal coordination and reduce the firm risk. While TMT-employee pay disparity may positively affect the firm performance through tournament incentives (as prior studies found), the disparity may deteriorate the firm operation in terms of the average performance as well as the variability of firm performance.7Recent years have seen the conflicts within companies, largely driven by the executive-employee pay disparity. Early this year, for instance, Samsung Electronics' labor union aired their grievance against their low pay compared to the skyrocketing pay for top management. Kakao's stock price crashed after the top executives exercised a large stake of their stock options. The pay disparity fuels the anti-management sentiment, because average employees are questioning the adequacy of increasing executive pays. The current study examines the association between vertical pay disparity within firm and stock price risk. Although TMT-employee pay disparity may facilitate firm innovation and improve firm performance through tournament competition, it may increase firm risk by heightening internal competition and discouraging cooperation between TMT and employees. Prior studies have focused on firm performance, while remaining relatively silent on pay disparity's effect on firm risk. We expand the literature by examining the relation between vertical pay disparity and firms' stock price risk. Drawing from a sample of firms listed in KOSPI and KOSDAQ during 2013 - 2018, we find the positive association between TMT-employee pay disparity and stock return volatility. We measure the TMT-employee pay disparity with the ratio of the average TMT pay to the average employee pay. We measure the stock return volatility by the standard deviation of weekly stock returns during the subsequent year. Our finding that TMT-employee pay disparity is positively associated with the stock volatility is consistent with our prediction that pay disparity may deepen conflicts between TMT and employees, leading to unstable firm performance and increase in stock price risk. Our findings extend our understanding about the consequences of TMT-employee pay disparity, by suggesting that vertical pay disparity not only affect the average firm performance, but also the variance of firm performance. We also examine whether the financial reporting quality moderates the relation of pay disparity and return volatility. Prior studies suggest that poor financial reporting quality can increase the information asymmetry between TMT and employees, which may further discourage their cooperation. The empirical result indicates that the positive association between pay disparity and return volatility is more pronounced with poor financial reporting quality measured by discretionary accruals. The additional test result suggests that the internal conflict between the TMT and employees may be driven by the low level of information sharing between the groups. In additional analysis, we find that TMT-employee pay disparity is also positively associated with stock price crash risk, supporting the adverse effect of internal conflicts on firm risk. It indicates that TMT-employee pay disparity increases the probability of sudden and substantial drop in stock price, above and beyond the variance of stock prices. Collectively, our study throws an important implication for board of directors who aim to enhance internal coordination and reduce the firm risk. While TMT-employee pay disparity may positively affect the firm performance through tournament incentives (as prior studies found), the disparity may deteriorate the firm operation in terms of the average performance as well as the variability of firm performance.8