심사할당 주파수의 가격 책정 방법론 대안: 우리나라 2G 주파수를 중심으로

홍철규 ( Cheol Kyu Hong ) 정보통신정책학회 2006 정보통신정책연구 Vol.13 No.1

연구논문 : 판매관리비와 미래 기업성과의 관계

홍철규 ( Cheol Kyu Hong ),정준희 ( Joon Hei Cheung ) 한국회계학회 2015 회계저널 Vol.24 No.2

재무제표 기본적 분석을 비롯한 전통적 관점에서는 매출액 대비 판매관리비의 비중이 높은 것을 비효율성을 나타내는 것으로 인식하는 경향이 강했으나, 최근 일부 연구에서 특정 상황에서는 판매관리비 지출이 기업성과에 긍정적인 측면이 존재할 수 있음을 보여주었다. 이는 판매관리비 지출이 긍정적인지, 부정적인지의 여부는 상황에 따라 다를 수 있다는 것을 제시하는 것이다. 본 연구는 Anderson et al.(2007)이 제기한 매출감소 시 판매관리비 지출의 긍정적인 효과 분석을 확장하여, 판매관리비 비중이 증가한 경우와 적자인 경우에 판매관리비 지출의 긍정적인 효과가 그렇지 않은 경우들과 비교하여 더 강한지 여부를 분석하고자 한다. 본 연구의 주요 분석 결과는 다음과 같다. 매출 감소 시 판매관리비 지출 비중의 변화와 기업의 미래성과(순이익, 영업이익, 기업가치)는 매출액을 제외하고는 대체적으로 정(+)의 관계를 가지는 것으로 나타났다. 특히, 판매관리비 비중이 전년보다 증가하거나 적자인 경우에 정(+)의 관계가 강하게 나타났다. 반대로 판매관리비 지출 비중이 감소하거나 흑자인 경우에는 판매관리비 지출은 기업 미래성과에 부정적인 영향을 미치거나 유의하지 않았다. 이러한 연구결과는 매출감소 상황을 동질적인 집단으로 간주하고 분석한 Anderson etal.(2007)의 연구에서 진일보한 연구로서, 제한적으로 판매관리비 지출 비중이 증가하거나 적자 등 기업 경영여건이 어려운 상황에서만 미래 기업성과에 긍정적인 신호로 작용할 수있다는 것을 본격적으로 실증한 것이라는 점에서 의의가 크다. 이러한 연구결과는 경영자의 판매관리비 지출 행태에 대한 이해를 제고함은 물론 재무분석가와 투자자 등 자본시장 참여자들에게도 유익한 시사점을 제공할 것이다. From the viewpoint of fundamental analysis of financial statements, an increase in the ratio of selling, general, and administrative costs to sales (hereafter SG&A cost ratio) between two periods is generally perceived as a negative signal about future firm performance (Anderson et al. 2007). However, recent few studies have shown that the increasing SG&A cost ratio has a positive influence on future profitability and firm value (Baumgarten et al. 2010). The existing literature thus show mixed evidence concerning the effects of SG&A cost ratio on future firm performance. While it has been argued that the expenditure of SG&A costs improves future performance as Research and Development costs and advertising expenses might do, it may negatively affect firm value because the expenditure of SG&A costs may suggest agency problems. Although some studies argue for a positive influence of an increasing SG&A cost ratio on future performance, few studies empirically examine the association between SG&A cost ratio and future performance. Therefore, this paper investigates the association between SG&A cost ratio and future performance that has not drawn much attention in the literature. The main results of the study are as follows. When sales decrease, we find a positive relationship between SG&A cost ratio and future performance, measured as net income, operating income, and market values. Specifically, when sales decrease or when they are loss firms, we also find a positive relationship between SG&A cost ratio and future performance. However, when sales increase or when they are profit firms, we find no significant relationship between SG&A cost ratio and future performance. The contributions of this research are as follows. It extends Anderson et al. (2007) by examining positive association between the expenditure of SG&A costs and future firm performance. It is also hoped that this study contributes to the enhanced understanding of the expenditure of SG&A costs by managers, and provides various implications to capital market participants and policy makers.

BSC 도입의 자원배분 변경효과 및 기업가치와의 관련성에 관한 연구

홍철규(Hong, Cheol-kyu),손부영(Shon, Boo-young) 대한경영학회 2008 大韓經營學會誌 Vol.21 No.3

투자기회집합을 어떻게 측정할 것인가?

홍철규 ( Cheol Kyu Hong ) 한국회계학회 2012 회계학연구 Vol.37 No.3

본 연구의 목적은 우리나라 자료를 이용하여 기존 문헌에 등장하는 주요 IOS 후보변수 및 변수군들의 적합성을 분석하여 연구자들이 투자기회집합(IOS) 대리변수를 선택하는데 도움을 주고자 하는 것이다. 기업의 중요한 회계재무정책과 계약비용, 투자기회는 서로 밀접히 연관되어 있다고 알려져 있어, IOS의 측정은 실증연구에서 매우 중요한 요소이다. 그러나, 기업이 직면한 투자기회는 성격상 직접적인 관찰이 불가능하고, 이를 어떻게 측정할 것인가에 대해서도 기존 문헌에서 통일된 의견을 발견할 수 없다. 이로 인해 연구자들을 임시방편적인 선택에 의존하게 하고 있다. 본 연구에서는 각 개별 IOS 후보변수들과 후보변수군들을 대상으로 한 요인분석을 통해 추출한 공통요인들이 IOS 대리변수로서 어느 정도 적합한지를 분석하여 바람직한 대리변수를 제시하고 한다. 연구결과, 제조기업 표본과 비제조기업 표본을 포함한 전체표본을 사용할 경우, 자산 시장-장부가치 비율, R&D지출-총자산 비율, 주가-주당이익 비율 변수군이 가장 적합한 것으로 나타났으며, 이 변수군을 사용하는 것이 단일 후보변수를 사용하는 것보다 더 바람직한 것으로 나타났다. 추가적으로 기업규모별로 4등분하여 실시한 분석에서는 가장 작은 규모의 기업그룹을 제외하고는 대체로 만족스러운 결과를 보이지 않았다. 본 연구는 IOS 측정에 관한 문제를 최초로 심도 있게 다룸으로써, IOS에 대한 이해의 폭을 넓혀주고 대리변수의 선택에 관해 많은 시사점을 제시해 주고 있어, 향후 관련 실증연구에 도움을 줄 것으로 기대된다. This study addresses the choice of an investment opportunity set(IOS) proxy variable from among IOS candidate variables and/or sets of variables, based on the Korean non-financial firms listed in KOSPI and KOSDAQ as of the end of 2009. It has been known that IOS is intricately related with various accounting and financial policies including choice of accounting procedure, capital structure, ownership structure and dividend policies, which are in turn largely involved with contracting costs. The proper measurement of IOS thus is essential for many empirical studies in the areas of accounting and finance. However, IOS faced by firms is unobservable in nature and it seems that no consensus has still emerged in the related areas concerning the choice of an IOS proxy variable or measurement of IOS. Some researchers choose to use a single variable as an IOS proxy variable, while others, recognizing that IOS is imperfectly measured by any single proxy variable, conduct sensitivity tests using various proxy variables or try to derive a factor from a set of observable IOS candidate variables using common factor analysis. However, the existing studies utilizing factor analysis often do not explicitly state why they have decided to choose the set of specific candidate variables for factor analysis, do not conduct a reliability test in terms of whether one meaningful factor can reliably be derived from their factor analysis, or do not provide a validity test in terms of the degree to which the derived factor predicts the latent investment opportunities. Furthermore, none of the existing studies conducts split sample tests, ignoring the fact that the performance of an IOS proxy variable may vary according to sub-sample groups. For these reasons, researchers often rely on the ad hoc choice of an IOS proxy variable, and many of the existing studies may involve measurement problems and some unknown biases in their results. To find an appropriate IOS proxy variable, this study works with seven IOS candidate variables used in Baber et al.(1996): investment intensity, geometric mean annual growth rate of market value of assets, market-to-book value of assets, R&D expenditure to total assets, market-to-book value of equity, earnings-to-price ratio, variance of return on market value. Factor analysis has been conducted for the sets which include more than two IOS candidate variables. A correlation analysis is also carried out between the factors derived from factor analysis/individual candidate variables and three IOS revelation variables to analyse the extent to which they predict firm`s investment opportunities. IOS revelation variables used are investment intensity, growth of book value of assets, revenue growth for the future five years, following the approach by Baber et al. Results of factor analysis are examined to judge whether it is possible to derive one meaningful factor from the chosen sets of variables. Analyses have first been carried out for the full sample, and then for split samples to ensure that the candidate proxy variable works not only for the full sample, but also for the split samples. For the full sample I find that the factors derived from the sets of variables of investment intensity, market-to-book value of assets, R&D expenditure to total assets, and earnings-to-price ratio are more appropriate than the factors derived from the sets of the variables used in existing literature in the light of correlation with IOS revelation variables. I also find that market-to-book value of assets and R&D expenditure to total assets are preferable if the use of single candidate variables is desired. Further, it is found that the use of the factor is preferable to any single candidate variables. For the split samples of manufacturing and non-manufacturing firms, I find that the use of a single variable suggests R&D expenditure to total assets for manufacturing firms and market-to-book value of assets and R&D expenditure to total assets for non-manufacturing firms. The factor from market-to-book value of assets, R&D expenditure to total assets, and earnings-to-price ratio and the factors from the most sets of variables of interest are desired for manufacturing firms and non- manufacturing firms, respectively. Combining these results, I find that for the full sample, R&D expenditure to total assets in case of a single variable, and the factor derived from market-to-book value of assets, R&D expenditure to total assets, and earnings-to-price ratio are desirable. The use of factor is also found to be preferable to that of a single candidate variable. Additionally, analyses based on the split samples according to firm size show that many of the IOS candidate variables and the factors derived from them are highly correlated with IOS revelation variables for firms in the fourth(smallest) quartile of size. However, disappointingly any meaningful relationship does not appear in other quartiles. Further research on the effect of size upon the choice of an IOS proxy variable seems to be required. By providing a comprehensive and in-depth analysis of the measurement of an IOS proxy variable, this study contributes to the enhanced understanding of IOS and helps researchers in the related areas.

산업수준 요소들이 판매비와관리비에 미치는 영향

홍철규 ( Cheol Kyu Hong ) 한국회계학회 2010 會計學硏究 Vol.35 No.4

본 연구는 12년간 패널자료를 이용하여 우리나라 제조업의 판매비와관리비 지출에 영향을 미치는 산업수준의 요소들에 대한 분석을 시도한 것이다. 기존의 연구들은 주로 기업수준의 변수들(대표적으로, 매출액)과 판매비와관리비의 관계에 대해 분석하였다. 그러나 비제조활동에서 발생하는 판매비와관리비 지출은 상당부분이 기업이 속한 산업의 구조적 특성에 의해 영향을 받으므로 그 결정요인을 기업내부적인 요소에 의해서만 찾는 것은 한계를 지닐 수밖에 없다. 이로 인해 판매비와관리비는 상당부분이 재량적인 성격의 비용으로 간주되어 지출규모의 합리성과 효율성 검증을 어렵게 하고 있다. 본 연구는 산업규모, 진입비용, 경쟁정도 등의 산업수준의 변수들이 기업의 판매비와관리비 지출규모에 미치는 영향을 분석하였다. 기업수준, 산업수준, 국가경제수준 등 복수 계층의 변수들의 효과를 분석하기 위해 계층선형모델(hierarchical linear model)을 사용하였다. 분석결과, 판매비와관리비는 매출액을 비롯한 기업 수준의 여러 변수들과 정(+)의 관계가 있으며, 산업규모 및 경쟁정도와는 부(-)의 관계가 있는 것으로 밝혀졌다. 반면에 진입비용에 대해서는 확정적인 결론에 도달하지 못했다. 판매비와 관리비를 별로도 구분하여 분석한 결과, 판매비는 기업수준의 변수들에 의해서만 주로 영향을 받는 반면, 관리비는 기업수준은 물론 산업수준의 변수들에 의해서도 영향을 받는 것으로 밝혀졌다. 본 연구의 결과는 그동안 기업수준에 한정해 온 원가동인에 대한 관점을 재검토할 것을 요구하는 것으로 보이며, 판매비와관리비의 원가행태에 대한 이해를 제고하고, 원가관리에 도움을 줄 수 있을 것으로 기대된다. This study analyses industry-level factors affecting size of the SG&A costs in the Korean manufacturing industry using a 12 year panel data set. The extant studies investigated the relationship between mainly firm-level factors(typically, sales) and SG&A costs. The monitoring and control of SG&A costs in the field have also largely been exerted in an ad hoc way. A typical indicator with which to judge the efficiency of the expenditure of SG&A costs is the ratio of SG&A costs to sales, yearly changes in the ratio generally being the concern of investors and analysts. This is in contrast to lots of attention payed to the efficiency of CGS (Cost of Goods Sold). For example, various management tools have appeared and drawn much attention in the area of CGS from practitioners as well as academia. Among them are Just-in-Time, Cell Manufacturing, Total Quality Control, and Activity-based Management, to give a few. The size of SG&A costs are largely affected by the structural characteristics of the industry within which a firm plays. We thus will inevitably reach the limit to the understanding of the behavior of SG&A costs if we try to explore the drivers of SG&A costs from the firm-level perspective only. The existing approaches have long rendered SG&A costs largely "discretionary" and thus difficult to test for rationality and efficiency. With an increasing voice for the efficiency of the expenditure of SG&A costs, however, it will be inevitable to test their efficiency along value chain activities. So far studies on cost drivers mainly have focused on internal business activities. Activity-based costing(ABC) suggests utilizing four conceptual cost hierarchies, the classification made according to the relationship between output volume and costs. Cost drivers advanced by ABC school also are firm-level elements including production volume, machine hour, number of batch, number of products, product complexity, etc. This concept applies not only to manufacturing activities but also to other value chain activities. In this regard, it may be said that cost drivers in ABC are better understood from an endogenous perspective, which is also true for traditional costing systems. More comprehensive, possibly advanced, school of thought concerning cost drivers comes from Shank and Govindarajan(1992), who generically categorize cost drivers into two groups: structural cost drivers and executional cost drivers. Nevertheless, this standpoint still falls into the endogenous cost driver perspectives. These perspectives certainly help explain the underlying drivers of costs of manufacturing activities, but may not help explain the drivers of those of non-manufacturing activities, which are mainly influenced by the factors outside a firm. SG&A costs, the large part of which consist of costs of non-manufacturing activities, have been considered "difficult to manage", or "discretionary". One possible explanation for that is the endogenous viewpoint of cost drivers. This study provides an enhanced understanding of the behavior of SG&A costs and helps us control them by exploring the effects of industry-level factors including the size of the industry, entry cost, the degree of competition on SG&A costs. The results using various econometrics models, including pooled OLS, Fixed effect models, Random Effect model and Random Coefficient model, to deal with our balanced panel data set, are analysed and compared. In doing so, a hierarchical linear model is utilized to analyse the effects of variables from multiple classes. The analyses show that SG&A costs are positively related to various firm-level factors including sales, and negatively related to the size of industry and the degree of competition. Unfortunately, however, we could not reach a reliable conclusion concerning the relationship between the entry cost and SG&A costs. In order to eliminate the possible effect of time which persist throughout the sample period, we also run a detrended regression and find similar results. Separating SG&A into S(selling) costs and GA(general and administrative) costs, we find that S costs are generally affected by firm-level factors only, while GA costs are affected by firm-level as well as industry-level factors. The results of the study raise a need to reconsider the perspective concerning cost drivers which has so far been confined within the firm-level only. This study contributes to the study of SG&A costs in particular and cost drivers in general, by enhancing the understanding of the behaviour of SG&A costs and providing a new viewpoint concerning cost drivers. It is also hoped that this line of management accounting research will contribute to supporting strategic decision making, beyond managerial decision making.

제품과 활동사이의 소비구조가 복잡한 경우의 제품원가계산

홍철규(Cheol Kyu Hong) 한국경영학회 2005 經營學硏究 Vol.34 No.2

It has often been argued whether the introduction of an activity-based costing (ABC) system in an organization is desirable boils down to a cost/benefit analysis. The costs of introducing ABC systems here include those related with complexities of the mechanism of costing system as well as with the implementation of the system. Further, it has been a conventional wisdom, as argued by Cokins(2001), that product costing becomes more accurate as cost attribution procedure takes multi-stages when the traditional two-stage costing is inappropriate because of the lack of direct mapping between final cost objects and cost pools. However, this paper shows that using a usual bottom-up multi-stage costing procedure may not enhance the accuracy of product costing while it requires more cost. The purpose of this paper is to analyse a product costing problem in the presence of a multi-layered resource consumption structure, which has drawn little attention from among accounting academics but appears in most business situations. The usual two-stage procedure where resources are assigned to activities and then the costs of activities are assigned to products represents a typical ABC. This treatment requires direct mapping between activities and products clearly exist so that the amount of each activity consumed by each product can be easily measured. However, this is often not the case in practice as we can witness in many large organizations such as BT. The problem caused by the ubiquitous presence of indirect mapping was also well pointed out by Datar and Gupta(1994). But, there has been little serious attempts among academics to overcome it. To tackle this situation, accounting practitioners such as Cokins(2001) normally utilize the approach so called an “expanded ABC”. The importance of this problem in practice is exemplified by Cokins(2001) when he calls the invention of an expanded ABC one of the most important top 10 developments in the field of ABC since the late 1980s. He further argues that costing system has made a Darwinian evolution from the traditional volume-based costing to the simple (two-stage) ABC, which is argued to be “an obsolete two-stage ABC”in indirect mapping environments, and further to an expanded ABC, which is a kind of a bottom-up multi-stage costing model. However, this paper shows that an expanded ABC is not free from cost distortion after all. It provides an in-depth analysis of a multi-layered resource consumption structure and an expanded ABC, where costs of intermediate activities are attributed to the next higher level activity cost pools and thus these costs aggregated into the higher level activity cost pools are attributed to the next higher level cost pools together, using the single cost driver. The way costs are aggregated and attributed in expanded ABC causes cost distortion because the cost pool homogeneity and the proportionality of pool costs (the constancy of charge-out rates), which are essential for a costing system to provide accurate costs, are no longer maintained and violated in this procedure. Thus, contrary to the common belief, the expanded ABC can not generate an accurate product cost information. We show that an expanded ABC in effect assumes that all cost pools are unit-level cost pools with regard to the next higher level activities (and/or products). In order to provide an accurate product cost in multi-layered resource consumption environments, a multi-stage costing system must not aggregate the costs from lower level cost pools into the higher level cost pools, rather it must attribute each level of costs directly to final cost objects using a “top-down ABC,”approach, which we recommend to utilize. The suggested top-down ABC may be more costlier than a bottom-up expanded ABC or the usual two-stage ABC, the fact which renders the costing system designer the cost/benefit criterion.

활동기준예산의 적합성을 위한 자원상호간의 관계 분석

홍철규 ( Cheol Kyu Hong ) 한국회계학회 2003 會計學硏究 Vol.28 No.1

활동기준예산(ABB)은 일반적으로 기존에 구축된 활동기준원가계산(ABC)시스템 속에서 작동하는 예산 설정기법으로 간주되고 있으며, 이의 특성에 대한 학문적 분석이나 연구를 찾아보기 어려운 실정이다. 그러나, 사전적 최적화를 요구하는 ABB는 사후적 계산목적의 ABC와는 다른 중요한 특성을 지니고 있음을 본 연구는 밝힌다. 본 연구의 주요 목적은 ABB가 보다 정확한 자원배분을 위해 필요로 하는 자원상호간의 관계를 경제학적으로 분석함으로써 ABB에 관한 이론적 틀을 제공하고, 이를 통해 ABB 도입에 대한 올바른 지침을 제공하고자 하는 것이다. 보다 구체적으로, 본 연구는 ABB 형태의 예산설정 방법이 가정하고 있는 기업의 생산활동 모델(생산함수의 형태)이 무엇인지를 분석하며, 이를 통해 기존 ABC시스템을 이용한 ABB가 기업의 최적(효율적) 자원배분을 가능하게 하는지에 대해 분석한다. 또한 ABB를 이단계 최적 예산설정모형으로 규정하고, 경제학의 전통적인 소비자 예산배분 방법인 이단계 예산배분모형과 비교, 분석하며, 이것이 기업 예산수립에 대한 시사점이 무엇인지를 분석한다. 따라서, 본 연구는 그 동안 학문적인 개념 정립이 미진했던 ABB를 이론적으로 체계화함으로써 회계이론의 발전에 기여할 것으로 생각된다. 또한 ABC와 ABB의 특성차이 조명을 통해 ABB에 대한 올바른 이해와 도입을 위한 시사점을 제공한다. This paper analyzes the economic characteristics of activity-based budgeting(ABB) systems, with an emphasis upon the comparison of ABB and activity-based costing(ABC). The economic analyses of the activity- based approach have been enabled due to its emphasis upon causal and thus functional relationships among production volume, activities and resources based on economic efficiency. This study shows that ABB requires more stringent condition than ABC in the formulation of activity categories, which is called weak homothetic separability. This is because ABB demands ex ante optimization of resource allocation with the consideration of interactions among diverse resources, while ex post ABC requires only local homotheticity. This suggests that ABB systems utilizing existing ABC systems may lead to non-optimal resource allocation. This paper also compares and contrasts ABB and traditional two-stage budgeting used in various consumer behavior analyses.

기업물류비 관리 방안에 관한 연구

홍철규(Cheol-kyu Hong) 한국국제상학회 2007 國際商學 Vol.22 No.1

Several studies have focused on the cost accounting side of corporate logistics costs, that is, how to calculate the exact total amount of logistics costs, how to categorize these costs, and how to calculate the logistic costs of various cost objects including products, customers, distribution channels and geographical areas. However, the ultimate goal in the cost accounting side of logistics costs is to manage logistics costs to price products, evaluate relative competitiveness and increase/decrease some part of or all logistics costs. This is the cost management side of logistics costs. Cost management of logistics costs includes increasing (not always decreasing) logistics costs deliberately if doing so decreases the total costs of the firm"s value chain activities. The goal of this study is to suggest the right direction about how to manage logistics costs and how to utilize recent cost management tools such as JIT(Just-in-time) manufacturing, Cell production, TOC(Theory of Constraints), and ABC(Activity based costing) in order to control and manage various logistics costs.

경영진 보상에서 재무성과 정보성의 역할; 시장차이를 통한 분석

홍철규 ( Cheol Kyu Hong ) 한국회계학회 2012 회계저널 Vol.21 No.6

회계 성과가 경영자 보상에 미치는 영향

이용훈 ( Yong Hun Lee ),홍철규 ( Cheol Kyu Hong ) 한국회계학회 2014 회계저널 Vol.23 No.4

경영자 보상에 영향을 미치는 재무적 성과에 대한 기존 연구들은 대부분 회계적 성과변수로 자기자본이익률(ROE)을, 시장 성과변수로 주가수익률을 이용하고 있다. 본 연구는 경영자 노력에 대한 ‘정보성(informativeness)’ 측면에서 이익지표, 특히 자기자본이익률에 충분히 반영되지 않은 추가적인 정보를 담고 있을 가능성이 큰 매출액 변화율이 경영자 보상에서 어떤 역할을 하는 지를 분석하고 있다. 분석은 2002년부터 2010년까지 국내 비금융업 KOSPI 상장기업의 패널자료를 이용하였으며, 기존의 회귀분석 대신 경로분석을 이용하여 회계성과가 경영자 보상에 미치는 직접효과와 변수간의 상호작용을 통해 매개되는 간접효과로 구분하여 측정하였다. 주요 연구결과는 다음과 같다. 첫째, 매출액 변화율은 경영자 보상에 직접적인 영향을 미치며, ROE 변화와 주가수익률(RET)을 통해 경영자 보상을 증가시키는 간접적 매개효과도 유의하게 존재한다. 둘째, 전체표본과 매출액,ROE 증감에 따른 그룹별 분석 결과, 회계성과지표 중에서도 매출액 변화율이 ROE 변화보다 경영자 보상에 대한 설명력이 높아 매출액 변수의 독자적인 영향이 큰 것으로 나타났다. 셋째, 시장성과가 경영자 보상에 미치는 영향의 상당 부분은 회계성과의 영향임을 경로분석을 통해 명시적으로 보여주고 있다. 본 연구의 의의는 매출 변수의 영향과 성과지표 상호간의 인과관계를 고려함으로써 회계적 성과가 경영자 보상에 미치는 영향에 대해 발전된 이해를 제공한 데 있다. Traditional research has investigated the impact of financial performance on executive compensation, especially focusing on the two contributors, Return on Equity(ROE) as a measure of accounting performance and stock returns(RET) of market performance. In the view of the informativeness principle, this study explores whether the sales growth rate, which is highly likely to embrace additional information about executive`s efforts that ROE cannot fully capture, contributes to executive compensation. In particular, this study analyzes the impact of sales as another measure of accounting performance on executive compensation and decomposes its impact into direct effects and indirect ones mediated by other variables. This study conducts path analysis instead of regression analysis past studies generally employed using the Korean non-banking KOSPI firms dataset from 2002 to 2010. The results show that sales are likely to have the direct effect on executive compensation as well as the indirect effect mediated by ΔROE and RET. Second, using both the total sample and four subgroups (i.e. sales increase/decrease × ROE increase/decrease), this study found that the magnitude of the impact of sales growth rate on executive compensation is larger than that of ΔROE, which consequently supports the important role of the sales factor. Third, the result of path analysis explicitly illustrates that the impact of market performance(stock return) on executive compensation is substantially due to the effect of accounting performance. This study proposes a further understanding of the effect of accounting performance on executive compensation by investigating the causal relationship between performance measures and sales.