DOI: 10.1002/mde.3934 ISSN: 0143-6570
Do the same executive compensation strategies and policies fit all the firms in the banking industry? New empirical insights from the CEO pay–firm performance causal nexus
Clement Olalekan Olaniyi- Management of Technology and Innovation
- Management Science and Operations Research
- Strategy and Management
- Business and International Management
Abstract
This study introduces the roles of firms' intertwining and policy variations across firms in the CEO pay–bank performance causal relationships in Nigeria, using the Dumitrescu–Hurlin panel Granger non‐causality test and second‐generation estimators. The findings reveal that banks' interdependence, diverse strategies, and policies vary across banks. In 11 banks, CEO pay is not a reward for bank performance or an incentive to perform. Meanwhile, two banks utilize performance‐based pay for their CEOs, while the remaining two adopt CEO pay as a performance motivator. The study concludes that firms' interdependence and policy variations across firms influence the CEO pay–bank performance nexus.