The Impacts of IT and EC Investments and Time Trends of the Speeds of Adjusting the Actual Toward the Maximum Pay upon CEO Compensation: An Extension

Abstract

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).