Executive compensation in North American high-technology firms: a contextual approach

Abstract

After reviewing the literature surrounding the link between executive compensation and innovation activities of North American firms, we examine two gaps in the area. First, we analyze how contextual factors can affect CEO pay in high-technology companies. In particular, we study three contextual dimensions: political, economic, and social. Second, we consider the specific case of executive compensation in high-technology firms when family ties are present at the helm. Drawing on agency rationale and previous research, we develop a series of instrumental propositions intended to provide the theoretical basis for a future research agenda in the area.

Keywords:

• agency theory
• executive compensation
• family firms
• global factors
• innovation

Notes

1. This classification is consistent with those researchers who define technology in term incremental and radical innovation (e.g. Dewar and Dutton 1986).

2. The United States is the country with the highest value in individualism (91 out of 100). It scores low in power distance (40, compared to the world average of 55) and ranks low also in uncertainty avoidance (46, compared to the world average of 64).