The Influence of Highest Paid Director on Financial Performance of Listed Banks in Nigeria

• Post by: airjournals
• May 13, 2024
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Ahmad, Uthman Bukola PhD & Zik-Rullahi, Haleemah Yetunde
Department of Accounting, Nile University of Nigeria, Plot 681 Cadastral Zone C00, Jabi, Abuja, Nigeria

Abstract The study is on the relationship between highest paid director and financial performance of banks in Nigeria from 2008 to 2022. In establishing the relationship, correlational research design was employed. The research encompasses listed banks in Nigeria. Utilizing secondary data from annual reports and accounts, a panel regression using feasible generalised least square (FGLS) was used to test the hypotheses due to presence of heteroskedasticity since Hausman and Lagrange Multiplier test choose random effect. The study was anchored on pay performance theory on the two models of financial performance which include NIM and Tobin’s Q. The findings reveal that highest paid director has a negative and significant relationship with financial performance of banks in Nigeria. In the same vein, the study could establish a positive relationship between total compensation and financial performance. The study’s findings yield recommendations for enhancing financial performance of Nigerian banks. There is a need for control on executive compensation of banks as these are vital to the financial performance of banks in Nigeria. Keywords Financial Performance; Highest Paid Director; Total Compensation Citation Ahmad, U. B. & Zik-Rullahi, H. Y. (2024). The Influence of Highest Paid Director on Financial Performance of Listed Banks in Nigeria. International Journal of Advanced Finance and Accounting, 5(1), 34-47 https://doi.org/10.5281/zenodo.11184399