A set of investment opportunity (IOS) reflects the firm prospective investment opportunity and payoff corresponding to investment in firm-specific physical and human capital. However, the value of future discretionary investment will rely on the managerial skill, particularly CEO who has the highest authority in corporate decision-making. Presently, the use of equity- based compensation package has been increasingly received a lot of attention in corporation and financial literature. This research aims to analyze the effect of CEO equity-based compensation to the firm’s investment opportunity set in U.S. We provide further analysis of how the sensitivity of CEO wealth with respect to firm’s stock price (Delta) and stock return volatility (Vega) will affect the investment opportunity set. Our finding suggest that firms compensated their CEO with equity-based compensation is effectively bring positive impact to firm’s IOS. We also find that as CEOs get more sensitive to their wealth with respect to firm stock price and stock return volatility, the IOS will also be higher, even more pronounced with Delta. This research takes deeper analysis of how the innate behavior such as gender influence the effect of compensation packages to IOS. Evidently, the result of this study suggests that in general gender doesn’t give direct impact to corporate decision-making. Female CEO act differently only under certain boundary condition. In the difference level of CEO tenure and total compensation pay, female CEO does matter and influence the effect of equity-based compensation, as well as Delta and Vega to the firm’s IOS.

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