This paper takes the CEO compensation and CEO compensation performance sensitivity of on-financial listed companies in Shanghai and Shanghai A shares from 2004 to 2023 as the study subject, designs and develops a systematic measurement system of digitalization through text analysis, and uses an empirical analysis to analyze the effect of digitalization on CEO compensation and CEO compensation performance sensitivity. The findings indicated that the corporate digitalization remarkably decreased the relationship between CEO remuneration and corporate performance, and strengthend the excess pay of CEOs. The conclusion was still stable after considering the intrinsic problem. In accordance with the mechanism analysis, the corporate digitalization can enhance CEO’s salary and decrease CEO’s ompensation-performance sensitivity through the channel of improving corporate governance and improving CEO’s holistic capabilities that can be adopted in business entity management. It was also identified that digitalization would strengthen the CEO’s relative comparable salary and decrease the vulnerability of relative comparable salary and performance.
