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Computer Industry Executives: An Analysis of the New Barons' Compensation

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  • Eli Talmor

    (Graduate School of Management, University of California, Irvine, California, 92697, and Recanati School of Business, Tel Aviv University, Israel 69978)

  • James S. Wallace

    (Graduate School of Management, University of California, Irvine, California 92697)

Abstract

In this paper we study the compensation determinants for CEOs in the computer industry and compare these findings with a large sample of firms from other manufacturing and service industries. We examine whether superior performance is rewarded by higher levels of compensation and find cash-based compensation, such as salary and bonus, is influenced by performance. Depending on the growth prospects of the company, pay is tied either to accounting measures of performance or to stock return. In contrast, stock-based compensation, such as options and restricted stock awards, is not reflective of performance but depends upon the firm's growth. Two other interesting findings are that the prevalent use of stock-based compensation in the computer industry does not appear to be the result of computer firms being “cash starved.” In addition, stock-based compensation does not appear to lead to larger executive stock ownership, as is widely believed.

Suggested Citation

  • Eli Talmor & James S. Wallace, 1998. "Computer Industry Executives: An Analysis of the New Barons' Compensation," Information Systems Research, INFORMS, vol. 9(4), pages 398-414, December.
    • Handle: RePEc:inm:orisre:v:9:y:1998:i:4:p:398-414
    DOI: 10.1287/isre.9.4.398
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    References listed on IDEAS

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    4. Soon Ang & Sandra Slaughter & Kok Yee Ng, 2002. "Human Capital and Institutional Determinants of Information Technology Compensation: Modeling Multilevel and Cross-Level Interactions," Management Science, INFORMS, vol. 48(11), pages 1427-1445, November.
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    6. Ling Xue & Gautam Ray & Xia Zhao, 2017. "Managerial Incentives and IT Strategic Posture," Information Systems Research, INFORMS, vol. 28(1), pages 180-198, March.

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