This study examine whether the components of Taiwan High Compensation 100 Index (Taiwan HC100) have abnormal returns after those stock are included. The Taiwan HC100 is constructed by 100 highest salary payment enterprises in Taiwan to connect the enterprise’ performance and employee’s incentive.
The empirical results show that the average abnormal returns on the components of electronic industry in the Taiwan HC100 are significantly negative after observing the event windows cover 30 days before announcement and 150 days after announcement. However, the average abnormal returns on non-electronic and financial stocks in the Taiwan HC100 are significantly positive. Therefore, there are different effects on announcement of components in Taiwan HC100.
