R&D Intensity and Executive Compensation: An Empirical Study Based on China's listed IT Companies

R&D investment is both an impetus for growth and a source of competitive advantage for IT companies. The executive compensation plan based on company short-term performance may impede the R&D investment. This paper examines the relationship between the R&D investment and the executive compensation in China's listed IT companies from 2007 to 2008. The result indicates that the boards of directors respond to, and promote the R&D investment through the executive compensation plans. The result also suggests that the executive compensation plans are more likely to focus on the top management teams than the CEOs.