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

Ziying Wei ()
Additional contact information
Ziying Wei: University of York, School for Business and Society

A chapter in Proceedings of the 2025 3rd International Academic Conference on Management Innovation and Economic Development (MIED 2025), 2025, pp 249-256 from Springer

Abstract: Abstract 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.

Keywords: Executive compensation; Cash compensation; Equity compensation; Firm value; Tobin’s Q (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-835-6_27

Ordering information: This item can be ordered from
http://www.springer.com/9789464638356

DOI: 10.2991/978-94-6463-835-6_27

Access Statistics for this chapter

More chapters in Advances in Economics, Business and Management Research from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().