Tansian University Journal of Arts, Management & Social Sciences

This paper examines the impact of directors’ remuneration on firms’ performance for thirteen (13) commercial banks listed on the Nigerian Stock Exchange for the period 2010 to 2017. The study is guided by the objective of finding the effects of directors’ remuneration on firm performance. The study employed Descriptive Statistics, Correlation Matrix, and the Ordinary Least Square Regression Techniques in analyzing the related data set. Findings from the study revealed that there is no significant relationship between directors’ remuneration (proxy as directors’ salary and bonus share) and firm’s performance in terms of shareholders’ value of Tobin Q, among listed banks in Nigeria. The implication of this result is that in spite of the huge remuneration package being offered to these directors, performance has not been significantly improved upon. This is meant to say that the amount of money being offered to the board of directors, within the banking industry has impacted on performance negatively but not significantly. This empirical evidence also implies a possibility of agency problem within the banking industry in Nigeria since directors can benefit themselves by maximizing raw earnings without due regard for market performance. The study recommends that beyond the pay-for-performance policy, an adoption of a sound framework together with an appropriate contractual arrangement that will guide the board of directors’ remuneration should be implemented. This, in the understanding of this study, will ensure better corporate governance practices among companies in the Nigerian banking sector.

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