FIRM ATTRIBUTES AND EXECUTIVE COMPENSATION OF CONGLOMERATES IN NIGERIA
DOI:
https://doi.org/10.57233/gujaf.v1i1.17Keywords:
Executive compensation, ROA, ROE, Institutional ownership, Executive ownership, Board composition, Board size and Conglomerates firmsAbstract
Executive compensation, particularly in the western countries has over the years received intense
media and research interest particularly from the occurrence of large corporate failures. This
brought to the fore, the seemingly huge compensation been received by the Executive Directors
irrespective of the nature of the performance of the companies they manage. This study examined
the impact of firm attributes on executive compensation using panel data from a sample of six listed
conglomerates in Nigeria for a period of nine years (2010-2018). Ordinary least square (OLS) was
used as technique of data analysis. The findings revealed a positive and significant impact of firm
financial performance (that is: return on asset and return on equity) on executive compensation
while executive ownership had a negative and significant effect on executive compensation of listed
conglomerates in Nigeria. The study concluded that firm financial performance and executive
ownership impact on the quantum of compensation paid to the Executive Directors, while
institutional ownership, board composition and board size does not significantly. Therefore, it is
recommended that the listed conglomerates in Nigeria should improve the design of the
compensation of the Executive Directors with financial incentives and stocks (equity) as it will
enhance the maximization of the shareholders’ wealth.