Managerial compensation and fixed intangible assets investment: the role of managerial ownership and firm characteristics

Purpose This study examines how cash and stock bonus compensations influence top executives to allocate a firm's resources fixed intangible assets investment the extent which this relationship is conditional on executives' ownership, firm growth, internal flow leverage. Design/methodology/approach Using data from 213 non-financial non-utility UK FTSE 350 firms for period 2007–2015, generating total of 1,748 firm-year observations, panel econometric methods are employed test authors’ model. Findings The authors observe that compensation positively impacts investment. However, has negative significant assets. further either or crucially invest more in when growth potential. Also, both with lower spend less Similar results also observed those bonus-motivated an increase low leverage but decrease high ones. Research limitations/implications A key limitation its concentration single country (United Kingdom). Thus, future studies can expand focus by looking at it perspective multiple countries. Practical implications practical relevance opportunity activity use (risk-avoiding incentive) induce corporate such activity. finding particularly important given increasing appetite knowledge-based economy create expansion through That is, investment, suggests executive cannot be ignored. Originality/value While paper builds classic Q theory literature, first – best knowledge explore