What is it about?
This study examines the causal relationship between CEO pay and firm performance in Nigeria for the period 1998–2010, using annual data of 63 non‐financial listed firms. We adopt a two‐step dynamic generalized method of moments to explore the causal relationship. The study establishes a bi‐directional relationship between CEO pay and firm performance. While CEO pay Granger‐causes firm performance, firm performance also Granger‐causes CEO pay. It implies that CEO pay acts both as a reward and a performance motivator. This study therefore suggests that CEO pay effectively aligns shareholders’ interests with those of CEOs; hence stakeholders should focus more on CEO pay as a corporate governance mechanism to reduce agency problem in non‐financial listed firms in Nigeria.
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Why is it important?
it provides new insights into corporate governance in sub-Saharan Africa
Perspectives
It further strengthens my prowess as a young scholar
Determinants of CEO pay: Empirical evidence from Nigerian quoted banks CLEMENT OLANIYI
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This page is a summary of: Analysis of the Nexus between CEO Pay and Performance of Non-Financial Listed Firms in Nigeria, African Development Review, September 2017, Wiley,
DOI: 10.1111/1467-8268.12279.
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