Hlaing, Khin Phyo2018-08-202018-08-202018-08-202018-08-01http://hdl.handle.net/10012/13617This study examines how the tax treatment of corporate tax-deductible restricted share units and employee tax-favoured stock options at the employer and employee level affect the extent of their use in executive equity compensation packages among public firms. I appeal to two theories, namely, corporate tax planning and managerial power, to address the research question. I hand-collect executive compensation data of 143 top non-financial Canadian firms traded on the Toronto Stock Exchange for the 2005-2015 period. I find some evidence that firms expecting a high tax rate use the proportion of executive equity compensation via corporate tax-deductible RSUs to a greater extent compared to firms expecting a low tax rate at the vesting year. The results are consistent with the inference that managers demanding a higher level of employee tax-favoured options in their total equity compensation when they have power to influence the executive compensation. The results also support that managerial power weakens the positive association between firms expecting a high tax rate at the vesting year and the use of corporate tax-deductible RSUs in executive equity compensation. The findings suggest that tax policy that artificially distinguishes among types of equity compensation, such as the current Canadian legislation, affects executive equity compensation design.enTax-deductibleExecutive compensationManagerial powerCorporate tax planningExecutivesTax deductionsCorporationsTaxationDoctoral Thesis