Sticky_cost_2[1].pdf - 1 STICKY COST BEHAVIOR OF BANK’S...

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1 STICKY COST BEHAVIOR OF BANK’S EXECUTIVE COMPENSATION IN FOUR SOUTH EAST ASIAN COUNTRIES 1 Slamet Sugiri Universitas Gadjah Mada Rahmat Febrianto Universitas Andalas [email protected] Etik Kresnawati UIN Sunan Kalijaga ABSTRACT Some studies indicate that selling, general, and administrative (SG&A) expenses have sticky characteristics. An expense is sticky if it increases as the activity increases, but it does not decrease as the activity decreases, in the same proportion as it increases. Different from previous studies that focus solely on SG&A costs in, mostly, manufacturing companies, we specifically focus on specific cost and specific industry. In this case, we focus on compensation costs in banks from four South East Asian countries. We choose banks’ executive compensations since banks in South East Asia have been publicly reporting their compensation. Executive compensation itself is a component of SG&A, so it may have sticky characteristic with it. We apply bootstrap method to tackle small sample problem in every country. Results show that executive compensations are not sticky, but, on the contrary, anti- sticky since the compensation decreases faster when the revenue decreases than its increases when the compensation increases. This finding gives a new perspective on the characteristics of executive compensation expenses. Keywords: corporate governance, banks, executive compensation, sticky cost behavior ABSTRAK Beberapa penelitian mengisyaratkan bahwa biaya penjualan, umum, dan administratif (PUA) memiliki karakteristik perilaku yang sticky . Suatu biaya dikatakan memiliki sifat sticky jika biaya meningkat ketika aktivitas meningkat, tetapi biaya tidak menurun ketika aktivitas menurun dalam proporsi yang sama dengan kenaikannya. Berbeda dengan studi-studi terdahulu yang hanya berfokus pada biaya PUA dan sebagian besar pada perusahaan pemanufakturan, kami memfokuskan pada biaya dan industri yang lebih spesifik. Dalam penelitian ini, kami memfokuskan pada biaya kompensasi eksekutif pada industri perbankan di empat negara di Asia Tenggara. Kami memilih kompensasi eksekutif bank di Asia Tenggal karena bank-bank di wilayah ini telah melaporkan kompensasi eksekutif mereka kepada publik. Oleh karena masalah sampel yang kecil, kami menggunakan metoda bootstrap untuk setiap negara. Hasil pengujian menunjukkan bahwa, kecuali di Pilipina, kompensasi yang diterima eksekutif adalah tidak bersifat sticky, tetapi sebaliknya, anti -sticky yaitu bahwa penurunan kompensasi lebih cepat ketika pendapatan menurun dibandingkan dengan kenaikannya ketika kompensasi meningkat. Temuan ini memberikan perspektif yang baru tentang karakteristik kompensasi eksekutif . 1 We would like to thank seminar participants at Faculty of Economics and Business, Universitas Gadjah Mada; Asian Academic Accounting Association, Bangalore; Simposium Nasional Akuntansi ke- 17 ; and 3 rd Economics and Research Business Festival, Universitas Kristen Satya Wacana for helpful comments. We also are grateful to FEB UGM for its financial support.
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