Impact of CEO, Director and Executive compensation on the Firm Performance with Moderating Effect of Research & Development

Abstract

The aim of this article is to investigate the relationship between the CEO, Director and executives’ compensation on firm performance. Moreover research and development as moderator check the relation of R&D over firm performance and CEO, directors, executives’ compensation in an emerging Pakistan market. This research uses the GSEM approach for the problem of abnormality and homoscedastic arise the sample data collected from PSE 100 index non-financial list over the era of 2014-2019.The data collection sample from 75 non-financial firm and final sample consisted on 69 firm 6 organization exclude due to unavailability of data. This study provide the evidence that CEOs, Director, executives’ compensation have a significant relation with firm performance while, R&D show that insignificant relation with CEO/directors and Executives compensation perhaps R&D show significant relation with firm performance. This research contributed the firm with their better remuneration to the executive; CEO and director have better financial performance. Meanwhile research and development also play pivotal role toward firm performance due to their innovative idea and technique. In future other Asian countries included in the sample set like India and also some variable like CSR, Firm age, top executive education and tenure for showing the better significant results.

Empirical Evidence of the Impact of Senior Executive Ownership on Firm Performance: Classification of Investments in Equity Instruments under IFRS 9 as a Mediator Variable

“…On the other hand, Al-Shammari (2021) documented a positive correlation between the remuneration of CEOs and the strategic risk of an enterprise. In contrast, Rehman et al (2021) found that executive compensation and company profitability are positively correlated. In addition, Ahamed (2022), Amewu and Alagidede (2021), Kayani and Gan (2022) on equity (ROE), and market value.…”

“…,Mehran et al (2022),Rehman et al (2021), andWang et al (2021) demonstrated that executive compensation is positively associated with FP as measured by the return on assets (ROA), return…”

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

“…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.…”

Executive compensation, risk and performance: evidence from the USA

“…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.…”