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Executive compensation of immigrant-founder firms in the USA

Author

Listed:
  • Chialing Hsieh
  • Vivek Pandey
  • Hongxia Wang

Abstract

Purpose - The purpose of this paper is to examine CEO compensation in immigrant-founder firms vs CEO compensation in non-immigrant-founder firms. Design/methodology/approach - Univariate and multi-variate tests are implemented. CEO compensation is designed as a function of the origin of a firm’s founder (immigrant or native), executive characteristics and firm characteristics with firm and year fixed effect regressions. CEO compensation is measured with cash pay, equity-based pay and total compensation. Findings - CEOs of immigrant-founder firms receive higher equity-based compensation and higher total pay than CEOs of non-immigrant-founder firms and the levels of their equity-based and total compensation are contingent upon their stock ownership. CEOs in high-growth immigrant-founder firms receive higher stock-based pay than their counterparts in non-immigrant-founder firms. Immigrant-founder family firms compensate their CEOs with higher equity-based pay than immigrant-founder non-family firms. Practical implications - The paper provides some explanations on the success of immigrant-founder firms. CEO compensation designs in immigrant-founder firms can be adopted in other firms. Social implications - The paper provides some rationale for immigration legislation to encourage the talented to come to the USA and start their business in the USA. Originality/value - This paper is the first to study executive compensation practice in immigrant-founder firms. The findings provide some practical and policy implications on immigration reform.

Suggested Citation

  • Chialing Hsieh & Vivek Pandey & Hongxia Wang, 2019. "Executive compensation of immigrant-founder firms in the USA," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 15(4), pages 546-563, March.
    • Handle: RePEc:eme:ijmfpp:ijmf-09-2017-0197
    DOI: 10.1108/IJMF-09-2017-0197
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    Cited by:

    1. Binz Astrachan, Claudia & Astrachan, Joseph H. & Kotlar, Josip & Michiels, Anneleen, 2021. "Addressing the theory-practice divide in family business research: The case of shareholder agreements," Journal of Family Business Strategy, Elsevier, vol. 12(1).

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