SHARE OWNERSHIP, EXECUTIVE COMPENSATION AND VALUE OF FIRM: A COMPARISON BETWEEN LOW AND HIGH LEVERED BANKS IN NIGERIA
Journal Title: Gusau Journal of Accounting and Finance - Year 2021, Vol 2, Issue 1
Abstract
It is still a paradox on whether individuals would be inspired when they deem it that resilient effort does improve the bank value and enhanced bank value would result into good pay. Conflicting finding have been reported in this area and as such, the study investigates impact of executive pay and share owned by executive as it affects the value of commercial banks listed in Nigeria. Proxies of compensation to executive employed are CEO pay, compensation to chairman and the highest pay to director. However, ratio of interest by executive in shares owned represents the ownership of share to banks’ executives. Value of the bank was measured using Tobin’s Q. Technique employed for estimation is the Robust OLS regression. Meanwhile, the tool of data analysis used was Stata version 13. Data from secondary source was used and were extracted from the published annual accounts statement of the banks covering the period from 2007 to 2018. Post estimation examination which includes normality test of standard error term, heteroscedasticity, multicollinearity was estimated to validate the regression results. The results revealed that, pay to CEO had positive and significant effect on value of high and low levered banks. However, compensation to chairmen and highest paid director had negative effect on value high and low levered banks. Additionally, effective of executive compensation on value of banks does not improve significantly through increase in executive share ownership for both high and low levered banks. It is recommended amongst others that the CEO pay should be tied to their performance. Increase in share ownership shouldn’t be used as a yardstick to achieve improved value for banks through executive compensation. Management should also tie the degree of Chairmen compensation and that of highest paid directors to enhanced value of banks through their efforts.
Authors and Affiliations
Ahmed Abubakar Zik-Rullahi, Musa Adeiza Farouk
Keywords
Related Articles
- EP ID EP709179
- DOI -
- Views 87
- Downloads 0
EFFICIENCY OF DEPOSIT MONEY BANKS IN NIGERIA: DATA ENVELOPMENT ANALYSIS APPROACH
In today’s turbulent and competitive operating environment, the survival of banks depends on the efficient use of scarce resources. This study examines the efficiency of ten (10) selected banks in Nigeria for the period...
INHERITANCE MANAGEMENT AND ACCOUNTABILITY: A CASE STUDY OF Z AND S INHERITANCE COMMITTEE IN LAGOS OF NIGERIA
Although the unprecedented level of unclaimed inheritance attracted the attention of legal and religious scholars across Muslim majority countries, concern over inheritance, however, took a global dimension when Musawah,...
INTERNATIONAL FINANCIAL REPORTING STANDARD ADOPTION AND AUDIT REPORT LAG OF DEPOSIT MONEY BANKS IN NIGERIA
This study examined whether the adoption of International Financial Reporting Standards (IFRS) has affected the effect of certain corporate governance variables on Audit Report Lag (ARL) of Deposit Money Banks (DMBs) in...
IMPACT OF AUDIT QUALITY ON EARNINGS MANAGEMENT OF LISTED DEPOSIT MONEY BANKS
The study examined the impact of audit quality on earnings management of listed deposit money banks in Nigeria for the period of 2012-2019 The study adopted correlational research design. The study used data extracted f...
SUSTAINABILITY REPORTING AND FINANCIAL PERFORMANCE OF NIGERIAN AND MOZAMBICAN OIL AND GAS COMPANIES
The thrust of this study is to determine the influence of sustainability reporting on the financial performance of firms from Nigeria and Mozambique and it is triggered by recent increase in sustainability reporting by...