Executive Compensation Structure and Firm Value: An Analysis of Cash vs. Equity-Based Pay: An Empirical Analysis Based on the Technology Industry

This paper investigates the impact of executive compensation structure (cash-based versus equity-based compensation) on corporate value, with a specific focus on the high-tech industry. Utilizing financial data from four listed companies (AAPL, DELL, HPQ, and SMCI) between 2019 and 2023, the study employs Tobin’s Q as a proxy for corporate value and examines compensation effects through multiple regression analysis. The results demonstrate that equity-based compensation exerts a statistically significant positive influence on corporate value, whereas cash-based compensation shows no measurable effect. These findings suggest that long-term incentive mechanisms effectively enhance executive motivation and corporate value, while excessive reliance on cash compensation may fail to align managerial interests with shareholder objectives. Although existing literature extensively explores executive compensation, research gaps persist regarding how industry characteristics and corporate governance structures moderate incentive effectiveness. The study provides empirical evidence for optimizing executive compensation policies and highlights the need for comparative investigations into industry-specific compensation structures. This work contributes to understanding the differential impacts of compensation components in technology-driven sectors and proposes directions for future research on incentive mechanism design under varying governance frameworks.