The relationship between research & development expenditure and executive compensation in high‐technology industries

Abstract

Outlines previous research on the links between R&D expenditure, firm value and executive compensation; and presents a study of the relationship between R&D expenditure and total cash executive compensation in the US pharmaceutical and computer/telecommunications industries between 1979 and 1996. Uses pooled cross‐sectional time series regression to find a positive link between compensation, R&D and accounting earnings for both industries over the whole period (although the significance varies for each in different sub‐periods); but mixed results for the relationship with cash flow. Discusses consistency with other research and the implications of the findings.

Citation

Persons, O.S. (1999), "The relationship between research & development expenditure and executive compensation in high‐technology industries", Managerial Finance, Vol. 25 No. 9, pp. 55-67. https://doi.org/10.1108/03074359910766154