How do executive excess compensation affect enterprise technological innovation: Evidence from a panel threshold model of chinese biopharmaceutical companies

•Establishes a specific range of executive excess compensation that significantly boosts the quality of enterprise technology innovation.•Reveals that current executive compensation levels generally fall short of what is deserved for enhancing ETI efficiency in the Chinese biopharmaceutical sector.•Tackles previously unaddressed gaps in the relationship between executive compensation and different dimensions of ETI, namely quality and efficiency.•Enhances understanding of corporate governance mechanisms, highlighting how varying executive compensation influences R&D investments.•First study to apply a threshold model to analyze the impact of executive excess compensation on technological innovation efficiency and quality​​​​. This study examines the levels of executive excess compensation (EEC) that stimulate the quality and efficiency of enterprise technology innovation (ETI). Using a behavioral agency perspective, we investigate how companies achieve superior ETI by providing sufficient incentives to motivate executives to perform to the best of their abilities. We use a panel threshold model based on a sample of Chinese-listed biopharmaceutical companies and find that: (1) providing an EEC between 0.0592 and 0.1907 significantly affects the promotion of ETI quality; (2) regarding ETI efficiency, executives generally do not receive the compensation that they deserve; and (3) the existing EEC has a weak negative impact on ETI efficiency, gradually disappearing as compensation increases. Heterogeneity analysis reveals that restricting EEC to the eastern area and strengthening the supervision of EEC in state-owned enterprises are effective measures for stimulating ETI. We advance the literature by providing guidance on compensation plans to companies in different regions.