EXECUTIVE DIRECTORS’ COMPENSATION AND SHARE PRICE PERFORMANCE OF LISTED CONGLOMERATE FIRMS IN NIGERIA
Abstract
Despite the substantial remuneration packages offered to executives, many firms continue to experience weak share price performance, volatile earnings, and declining investor confidence. This misalignment suggests that compensation structures may not be effectively designed to incentivize executives to maximize shareholder returns. In view of this, this study examined the effect of executive directors’ compensation on share price performance of listed conglomerate firms in Nigeria. The study adopted an ex-post facto research design and utilized a panel data of sixty (60) pooled observations gathered from six (6) listed conglomerate firms in Nigeria over ten (10)-year period (2015-2024) and employed a panel multiple regression technique to analyze the data via E-views 10.0 statistical package. The study findings revealed among others that bonus payment has significant positive effect (Coeff. = 4.0789{0.0375}) on earnings per share of listed conglomerate firms in Nigeria,. Conclusively, the results provide empirical evidence that executive directors' compensation have a significant impact on share price performance, highlighting the need for corporate boards and regulators to carefully consider the design and structure of executive compensation packages. The recommendations made included that corporate boards should consider aligning bonus payments with specific performance metrics to ensure that executive directors are incentivized to drive shareholder value.
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