The Relationship Between Board and Executive Compensation and Tax Planning of Listed Companies on the Stock Exchange of Thailand

Nata Singprasert; Kanjana Phonsumlissakul

Authors

Nata Singprasert Kasetsart Business School, Kasetsart University, Thailand
Kanjana Phonsumlissakul Asst. Prof. Dr., Kasetsart Business School, Kasetsart University, Thailand

Keywords:

Board of Directors’ Compensation, Executive Compensation, Tax Planning

Abstract

Compensation may serve as a motivation for board members and executives to engage in tax planning. This study aims to examine the relationship between board and executive compensation and tax planning. Data are collected from 693 listed firms in Thailand during 2022–2023. The results show that board compensation is positively associated with tax planning measured by the generally accepted accounting principle's effective tax rate and the ratio of tax expenses to total assets, indicating a tendency for the company to engage in less tax planning. This reflects that increasing board compensation may strengthen its governance role, emphasizing tax transparency. Meanwhile, there is no significant relationship between executive compensation and corporate tax planning.

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