<p>This study examines how CEO inside debt holdings, including pension benefits and deferred compensation, affect firms’ innovative output, with a particular focus on differences between high-technology and non-high-technology sectors. The purpose is to clarify whether debt-based compensation structures, by aligning CEOs’ incentives with those of debtholders, discourage risk-taking in innovation, which is especially critical for technology-driven firms. Using panel data including 5,705 firm-year observations in the United States and employing the fixed-effects Tobit model with patents and citations as measures of innovation, the study finds that higher pension benefits are associated with reduced innovative activity in high-technology firms, while this effect is not observed in non-high-technology firms. In contrast, deferred compensation does not significantly affect innovation outcomes in either context. The originality of this study lies in linking CEO inside debt holdings to sector-specific differences in innovation, extending the literature on executive incentives and corporate innovation. These findings imply that compensation design can hinder innovation in high-technology environments, raising important considerations for boards when structuring CEO pay to implement long-term innovations.</p>