Our study makes two contributions to the literature on compensation decisions and
R&D intensive firms. First, it uses a national sample to provide new evidence on
differences between large R&D intensive and other firms in actual compensation outcomes
for top- and mid- level managers. Our focus is on potential differences in base salaries,
short-term bonus payments and long-term incentive eligibility practices. Second, aside from
Balkin and Gomez-Mejia's work, much of literature tends to be descriptive, anecdotal, or
speculative, offering only limited theoretical explanations for observed patterns of
compensation differences. In contrast, we consider agency theory, leading edge, and
administrativeflife cycle explanations for why firms that emphasize R&D would be
expected to compensate managers differently.