The purpose of this article is to deal with the problem of how corporate governance will affect “the relationship between of excess compensation and firm performance.” Companies listed in TSE and OTC from 1996 to 2007 are included in the sample data. And we find that when board holding percentage is higher, the excess compensation and firm performance are positively correlated, vice versa. Also, when managers have some control over the process of compensation determination, the excess compensation and firm performance are negatively correlated, and vice versa.