Executive Compensation and Compensation Risk: Evidence from Technology Firms
30 Pages Posted: 17 May 2013
Date Written: May 16, 2013
The purpose of this research is to investigate factors that contribute to technology firms paying higher compensation than non-technology firms, and why the mix of compensation at technology firms is different than the compensation packages at non-technology firms. Using a sample of 1,009 firm-year observations for the five-year period from 2001 to 2005, we find that the total compensation paid to the CEOs of technology firms is higher than the total compensation paid to the CEOs of non-technology firms, and that the value of the stock options granted to the former is greater than the value of the stock options granted to the latter. This difference can be explained by the risk premium that technology CEOs have in their compensation packages. The implications of this finding are discussed in the conclusion of the paper.
Keywords: Executive compensation, Compensation risk, technology firms
JEL Classification: J33, J44, M12, M52
Suggested Citation: Suggested Citation