The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu The leading online blog in the fields of corporate governance and financial regulation. Tue, 14 Apr 2026 11:31:36 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.8 https://corpgov.law.harvard.edu/wp-content/uploads/2024/02/cropped-photography-4-e1706898544564-1-32x32.png Executive Compensation and R&D Intensity – The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu 32 32 Executive Compensation and R&D Intensity https://corpgov.law.harvard.edu/2011/09/14/executive-compensation-and-rd-intensity/?utm_source=rss&utm_medium=rss&utm_campaign=executive-compensation-and-rd-intensity https://corpgov.law.harvard.edu/2011/09/14/executive-compensation-and-rd-intensity/#comments Wed, 14 Sep 2011 13:19:28 +0000 http://blogs.law.harvard.edu/corpgov/?p=21550?d=20150106094552EST Posted by R. Christopher Small, Co-editor, HLS Forum on Corporate Governance and Financial Regulation, on Wednesday, September 14, 2011
Editor's Note:

The following post comes to us from Rajiv Banker, Professor and Merves Chair of Accounting and Information Technology at Temple University; Dmitri Byzalov, Assistant Professor of Accounting at Temple University; and Chunwei Xian, Assistant Professor of Accounting at Northeastern Illinois University.

In our paper, Executive Compensation and Research & Development Intensity, which was recently made publicly available on SSRN, we examine the mediating effect of R&D intensity on the weights on signals of ability and financial performance measures in executive compensation contracts. There are many prior studies that investigate the impact of R&D intensity on total executive compensation (e.g., Dechow and Sloan 1991; Kwon and Yin 2006; Cheng 2004). However, prior studies did not incorporate adverse selection in their analysis. In other words, they did not investigate how R&D intensity affects the role of managerial ability in executive compensation. In contrast, we investigate how R&D intensity impacts the weights placed on human capital measures such as technical work experience, science and engineering degrees, and past experience in R&D intensive firms.

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