Stakeholders’ Compensation and Corporate Value: Nigerian Banking Sector Experience in Covid-19 Era

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Stakeholders’ Compensation and Corporate Value: Nigerian Banking Sector Experience in Covid-19 Era

ABSTRACT

This study investigated the effect of stakeholders’ compensation on corporate value: Nigerian banking sector experiences in COVID-19 era. A pre and post analysis of the COVID era was conduct using data from 2017 to 2021. Directors’ remuneration (DTRM) and dividend per share (DVPS) are the independent variables and proxies for stakeholders’ compensation while net assets value per share (NAVPS) was used as the dependent variable and measure for corporate value. A sample of seven (7) deposit money banks was selected from the 22 deposit money banks listed on Central Bank of Nigeria website as at March 31, 2021. Data extracted from the selected banks were analyzed using descriptive statistics and panel least squares regression analysis. Findings from the analysis suggest that DTRM (P=0.0699; 0.0000 and 0.3161) has positive and insignificant effect on NAVPS during pre and post COVID but positive and significant effect during COVID. Findings showed that DVPS (P=0.0003; 0.0000 and 0.0073) has positive and statistically significant effect on NAVPS of money deposit banks in Nigeria during both periods. The study recommended that policy makers for Nigeria banks should design appropriate directors’ remuneration incentive scheme that will not only attract, but will also motivate and retain efficient directors for attainment of the corporate objectives. Dividend policy that will strike a balance between dividend payment and earnings retention to create the firmest value should be formulated. The implications of the findings were that a unit change in DTRM caused 0.003% 0.007% and .006% changes in NAVPS during the periods respectively. DVPS which was a key driver to changes in NAVPS in pre COVID doubled its effect during COVID and sustained the impact after COVID.

Keywords: Directors’ Remunerations; Dividend Per Share; Net Assets Per Share; Covid-19 Era

Authorship
1Ugbor, Raphael Oluchukwu, 2Inyiama, Oliver Ikechukwu, 3Ezugwu, Chris Ikechukwu

FULL PDF  |  DOI: 10.5281/zenodo.7339419

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