CEO Compensation and US High-tech and Low-tech Firms’ Corporate Performance
Abstract
ABSTRACT
Many factors contribute to the determination of top executive compensation. This paper explores and examines the systematic difference of high-tech and low-tech CEO pays. It examines the relationship between top executive compensation and an Organizational factor, a Market factor and an Accounting factor. It tests CEO’s salary, bonus, and long-term compensation with respect to corporate reputation, ROE, Tobin’s Q, CEO shareholding and firm size.
The results show that CEOs’ Salaries at high-tech firms shows a significantly positive relationship with ROE, Tobin’s Q, and corporate reputation, while only corporate reputation shows a significant relationship with CEOs’ salaries at low-tech firms. In addition, both the high-tech and low-tech firm executives’ total compensation are significantly and positively related to Tobin’s Q, and corporate reputation. Similar results are reported with Long-term compensation. In general, high-tech firms tend to use more sophisticated performance measures for the determination of CEO compensation, while low-tech firms seem to use a simple performance measure such as corporate reputation.
Keywords: US CEO Compensation, Corporate Reputation, Accounting Performance, Market Performance
Many factors contribute to the determination of top executive compensation. This paper explores and examines the systematic difference of high-tech and low-tech CEO pays. It examines the relationship between top executive compensation and an Organizational factor, a Market factor and an Accounting factor. It tests CEO’s salary, bonus, and long-term compensation with respect to corporate reputation, ROE, Tobin’s Q, CEO shareholding and firm size.
The results show that CEOs’ Salaries at high-tech firms shows a significantly positive relationship with ROE, Tobin’s Q, and corporate reputation, while only corporate reputation shows a significant relationship with CEOs’ salaries at low-tech firms. In addition, both the high-tech and low-tech firm executives’ total compensation are significantly and positively related to Tobin’s Q, and corporate reputation. Similar results are reported with Long-term compensation. In general, high-tech firms tend to use more sophisticated performance measures for the determination of CEO compensation, while low-tech firms seem to use a simple performance measure such as corporate reputation.
Keywords: US CEO Compensation, Corporate Reputation, Accounting Performance, Market Performance
Contemporary Management Research / CMR / ISSN 1813-5498
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