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Information Technology Investments Top Management Compensation and Stock Ownership
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A better understanding of the determinants of variations in firms'
investments in information technology (IT) is important for both
researchers and practitioners in the information systems (IS) function . In
this study, we examined the effects of top management compensation design
and managerial stock ownership on IT investments using an agent theoretic
framework. We first define the 'industry- referent' IT investment as the
level of IS budget necessary for firms to compete effectively in a
particular industry . Initial evidence supported our premise that the
absolute deviation of the IS budget from the industry characteristic level
is negatively related to firm performance . Based on a sample of 72 leading
US companies, we found strong empirical support for the proposition that
the absolute deviation of the IS budget from the industry characteristic
level decreases as: (a) the proportion of common stock held by the top
management increases , and (b) the longer term emphasis of the top
management compensation package increases . Implications for future research
from both conceptual and methodological perspectives are noted.
Lawrence Loh and N. Venkatraman - Personal Name
1000108192
NONE
Management
English
2013
1-56
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