Analysis shows that investment in information technology and e-commerce influences the adjustment speed of CEO compensation in US firms, suggesting a more realistic model.
We analyze the impacts of information technology (IT) and e-commerce (EC) investments and time trends of the speeds of adjusting the observed (actual) toward the desired (maximum) pay upon chief executive officer (CEO) compensation in US firms, based on the adjustment model and its associated adjustment valuation (AV) approach, under the assumption of stochastic and dynamic adjustment speed (AS); and, then, we compare the new results to the findings of Lin and Chen (2024) based on the assumption of dynamic and variable AS. A comparative analysis strongly suggests that the new results are more realistic in a world full of uncertainty (Lin et al., 2019, pp. 769 and 777).
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Lin et al. (2025) studied this question.
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