Based the two different theory of family business including agency theory and stewardship theory, this study analyzes whether firm performance, the incentive effect on top managers excess pay, and the governance mechanism of directors and supervisors are influenced by the important characteristics of family business including single family controlled firm, family management, and family control. Empirical results find that the influence of family business factors on firm performance is not significant. There is generally the incentive effect on top managers excess pay in Taiwan publicly listed firm, but not for family business. We more support the stewardship theory. Furthermore, the higher shareholding ratio of directors and supervisors would benefit firm’s operation. However, the above positive effect weakens in family business.
