Purpose: The purpose of this paper is to examine CEO compensation in immigrant-founder firms vs CEO compensation in non-immigrant-founder firms. Design/methodology/approach: Univariate and multi-variate tests are implemented. CEO compensation is designed as a function of the origin of a firm’s founder (immigrant or native), executive characteristics and firm characteristics with firm and year fixed effect regressions. CEO compensation is measured with cash pay, equity-based pay and total compensation. Findings: CEOs of immigrant-founder firms receive higher equity-based compensation and higher total pay than CEOs of non-immigrant-founder firms and the levels of their equity-based and total compensation are contingent upon their stock ownership. CEOs in high-growth immigrant-founder firms receive higher stock-based pay than their counterparts in non-immigrant-founder firms. Immigrant-founder family firms compensate their CEOs with higher equity-based pay than immigrant-founder non-family firms. Practical implications: The paper provides some explanations on the success of immigrant-founder firms. CEO compensation designs in immigrant-founder firms can be adopted in other firms. Social implications: The paper provides some rationale for immigration legislation to encourage the talented to come to the USA and start their business in the USA. Originality/value: This paper is the first to study executive compensation practice in immigrant-founder firms. The findings provide some practical and policy implications on immigration reform. © 2019, Emerald Publishing Limited.

Immigrant-founder firms Corporate governance Agency theory Executive compensation

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