Predictors of CEO compensation have received tremendous attention. Most studies were built on the agency theory predicting how board set compensation for reducing agent-principal conflict. This study tries to combine agency theory with information processing by introducing information technology capability (ITC) as predictor of CEO compensation. I try to examine how firm ITC can lower down CEO information demand and close the information asymmetry gap between CEO and directors which leads to lower total compensation and reduced level of long term incentive. Data is collected through three public available sources from the year 2006 to 2012. The data showed interesting and profound results.

Keyword: CEO compensation, firm information technology capability agency theory, information p...[ Read more ]

Predictors of CEO compensation have received tremendous attention. Most studies were built on the agency theory predicting how board set compensation for reducing agent-principal conflict. This study tries to combine agency theory with information processing by introducing information technology capability (ITC) as predictor of CEO compensation. I try to examine how firm ITC can lower down CEO information demand and close the information asymmetry gap between CEO and directors which leads to lower total compensation and reduced level of long term incentive. Data is collected through three public available sources from the year 2006 to 2012. The data showed interesting and profound results.

Keyword: CEO compensation, firm information technology capability agency theory, information processing view,