The determinants of CEO compensation in Nigeria : a quantitative study

Abstract: The increase in executive compensation in the last few decades has attracted interest in CEO compensation and other top management pay. This has caused the determinants of CEO compensation to remain at the center of debate and discussion among the academic literatures in recent time. Despite the growing discussion in this field, there has not been a definite solution and the problem remains unsolved. This is because different factors determining CEO compensation has been characterized by disagreements, while monetary rewards are considered by most studies as determinant for CEO compensation. Based on the above, the study investigates the determinants of CEO compensation in Nigerian. To accomplish it objectives, the study was conducted on fifty (50) listed companies in Nigeria where secondary data from year 2016 to 2018 were used. Linear regression was used to confirm the relationship between study dependent and independent variables. The study finds out that board compensation is a determinant of CEO compensation among the listed companies in Nigeria; CEO shareholding is not a determinant of CEO compensation; firm performance is not a determinant of CEO compensation among the listed companies in Nigeria; firm size is a determinant of CEO compensation among the listed companies in Nigeria; and board size is a determinant of CEO compensation among the listed companies in Nigeria. The study therefore recommends that board should generally review the compensation structure of the board and CEO to a level that would not be negatively affect firm performance and survival. The study also recommends an increase in the number of members on the board by firms.