CEOs Compensation and Firm Performance: Evidence from Bhutan

Singh, Kriti Bhaswar; Patil, Deepak Tulsiram; Khandelwal, Rahul

doi:10.1109/iccike51210.2021.9410718

Cited by 4 publications

(5 citation statements)

References 21 publications

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“…Previous empirical studies on the relationship between Executive Compensation and Firm Performance have continued to yield conflicting findings. While many of these studies have established a negative, weak and no relationship (Al-Azhary, 2022;Singh, 2021;Rath, 2020;Cieslak et al 2021;Jiang & Zhang, 2018;Olaniyi et al, 2017), others have established positive and strong relationship (Ahamed, 2022;Omamo et al, 2022;Al-Shammari, 2021;Ma, 2021;Rehman et al, 2021;Wu, 2021). Based on these conflicting findings, this study therefore becomes imperative to further interrogate the nature of direction of this relationship between executive compensation and firm performance of listed non-financial firms in Nigeria.…”

Section: Introductionmentioning

confidence: 90%

“…Secondly, the Equity-based remuneration/ Variable compensation (the value of granted equity, value of awarded long-term incentive plans and options awarded either as intrinsic or estimated). Similarly, Singh et al, (2021) This is a fixed amount of money paid to an employee by an employer in return for work done (Davis et al 2022). Base salary is the largest component of the total compensation package for most employees which does not include other benefits from an employer (Hofmann, 2015).…”

Section: Executive Compensationmentioning

confidence: 99%

“…These are awards given to managers if a given benchmark is achieved. (Singh et al 2021;Omamo et al 2022) opined that executive remuneration is a performance motivating tool that encompasses incentives in the form of cash bonuses which are awarded in lump sum when the operational year ends. The most common measures for bonuses are based on accounting data which elicits measures that are directly linked to the executives' specific areas of responsibility.…”

Section: Bonusesmentioning

confidence: 99%

“…Cash bonuses are used to reward executives for their short-term successes in the firm (Singh et al 2021). Singh et al (2021) further argued that executive cash compensation (bonuses) are significantly positively associated with firm performance.…”

Section: Bonusesmentioning

confidence: 99%

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Effect of Executive Compensation on Financial Performance of Listed Non-Financial Firms in Nigeria

Mohammed¹,

Ibrahim²,

Maitala³

2023

J. Professional Business Review

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Purpose: Examine the effect of executive compensation on the financial performance of listed non-financial firms in Nigeria. Theoretical framework: The continuous rise in compensation of executives in Nigeria without a corresponding increase in firm performance has continued to generate intense debates and controversial opinions within the corporate environment. Consequently, the need to understand the degree of relationship between executive compensation (measured by salary emolument, bonuses, stock-based compensation and pension) and firm performance (measured by return on equity). Design/methodology/approach: A correlational research design was used based on a filtered census population of 63 firms listed on Nigeria’s stock exchange. Secondary data was obtained from the annual financial reports of these firms and analyzed using the generalized methods moments. Findings: The study found salary emoluments, bonuses and stock-based compensation, as measures of executive compensation, have negative impact on the return on equity of listed non-financial firms in Nigeria. Where executive pension claims a positive impact on the return on equity of listed non-financial firms in Nigeria. Research, Practical & Social implications: Regardless of executive compensation being an incentivizing tool for the executive team, which has a significant impact on company strategy, decision-making, and value creation as well as enhancing executive retention, different components of executive compensation exert different effect on the financial performance of firms as confirmed by this research. Originality/value: The research points out different executive compensation measures have different impacts on performance. Consequently, the need for stakeholders to determine the perfect combination of the compensation measures that best drive performance.

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Section: Introductionmentioning

confidence: 90%

Section: Executive Compensationmentioning

confidence: 99%

Section: Bonusesmentioning

confidence: 99%

Section: Bonusesmentioning

confidence: 99%

See 2 more Smart Citations

Effect of Executive Compensation on Financial Performance of Listed Non-Financial Firms in Nigeria

Mohammed¹,

Ibrahim²,

Maitala³

2023

J. Professional Business Review

View full text Add to dashboard Cite

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“…Various studies (Guay, 1999; Coles et al , 2006; Armstrong & Vashishtha, 2012;Olaniyi et al, 2017; Jiang & Zhang, 2018; Rath et al , 2020; Al-Shammari, 2021; Cieslak et al, 2021; Ma et al , 2021; Rehman et al, 2021; Singh et al , 2021; Wu, 2021; Ahamed, 2022; Al'azhary et al , 2022; Omamo et al , 2022; Mohammed et al , 2023) on executive reward of the CEOs have looked into the impact of CEO wealth incentives on risk taking. Although these studies provided evidence of a nexus between compensation and risk taking, the outcomes have lacked consensus on the direction, degree and significance of the relationship.…”

Section: Introductionmentioning

confidence: 99%

Executive compensation, risk and performance: evidence from the USA

Bouteska,

Sharif,

Abedin

2024

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Purpose Given the serious question raised by the subprime of the 2008 global financial crisis over the rising practices of excessive rewarding of executives in the USA and European firms, the executive pay-performance nexus has emerged as a popular topic of debate in the contemporary corporate finance research. Conducted mostly on the Anglo-Saxon contexts, research outcomes have been inconclusive and dichotomous. Considering this backdrop, this study aims to investigate the endogenous relationship between executive compensation and risk taking in the context of the USA. Design/methodology/approach Using a large sample of non-financial firms from 2010 to 2020 based on panel data and two-stage least square regression. In this study, the riskier corporate decision is measured as book leverage and ratio of R&D expense to total assets. Chief executive officers’ (CEO) experience and age are used as instrumental variables, and these are expected to influence compensation incentives and, hence, affect firm riskiness indirectly. Firm size, return on assets and CEO turnover are reported to affect compensation and corporate decisions, therefore, included as control variables. Given that higher executive compensation is related to riskier corporate decision in firms, this study incorporates total wealth (i.e. accumulated equity related compensation) as an additional proxy of compensation, and this selection is justifiable by the perfect contracting notion of the agency theory. Findings The results of this study show a significant positive and increasing nexus among compensation and riskier corporate decisions. Besides, the compensation level proxied through the percentage of each form of compensation in total compensation is very important as greater equity and greater salary diminishes risk taking. Practical implications The outcomes of this study have useful implications for firm stakeholders and policymakers. Originality/value The level of pay measured by the percentage of each type of compensation in total compensation is of utmost importance as it can increase or decrease risk taking in corporate decisions.

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Post-Merger & Acquisition Financial Performance of Selected Indian Firms

Singh

Patil

2023

2023 International Conference on Computational Intelligence and Knowledge Economy (ICCIKE)

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CEOs Compensation and Firm Performance: Evidence from Bhutan

Cited by 4 publications

References 21 publications

Effect of Executive Compensation on Financial Performance of Listed Non-Financial Firms in Nigeria

Effect of Executive Compensation on Financial Performance of Listed Non-Financial Firms in Nigeria

Executive compensation, risk and performance: evidence from the USA

Post-Merger & Acquisition Financial Performance of Selected Indian Firms

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