How director remuneration impacts firm performance: an empirical analysis of executive director remuneration in Pakistan
This study empirically investigates the interrelationship between pay and performance of CEOs/board of directors in an emerging market, Pakistan. The study uses GMM approach to account for the problem of potential endogeneity and unobserved heterogeneity that arises due to the potential reverse caus...
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| Format: | Article |
| Language: | English English English |
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Borsa Istanbul Anonim Sirketi
2019
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| Online Access: | http://irep.iium.edu.my/70554/ http://irep.iium.edu.my/70554/1/70554_How%20director%20remuneration%20impacts%20firm_article.pdf http://irep.iium.edu.my/70554/2/70554_How%20director%20remuneration%20impacts%20firm_scopus.pdf http://irep.iium.edu.my/70554/13/70554_How%20director%20remuneration%20impacts%20firm_wos.pdf |
| _version_ | 1848787306154033152 |
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| author | azlam, ejaz Haron, Razali Tahir, Muhammad Naveed |
| author_facet | azlam, ejaz Haron, Razali Tahir, Muhammad Naveed |
| author_sort | azlam, ejaz |
| building | IIUM Repository |
| collection | Online Access |
| description | This study empirically investigates the interrelationship between pay and performance of CEOs/board of directors in an emerging market, Pakistan. The study uses GMM approach to account for the problem of potential endogeneity and unobserved heterogeneity that arises due to the potential reverse causality (pay and performance) for a sample of non-financial firms listed in the KSE over the period of 2009e2016. This study provides evidence that pays-performance framework supports the agency theory whereby CEOs/board of directors are compensated for their
prior level of market-based performance. In addition, pay performance framework weakly support the notion of the steward/tournament theory where the CEOs/board directors pay sensitivity weakly enhanced the firm performance. Thus, CEOs/board director's remuneration is highly
persistent and takes time to adjust to long-run equilibrium. |
| first_indexed | 2025-11-14T17:22:50Z |
| format | Article |
| id | iium-70554 |
| institution | International Islamic University Malaysia |
| institution_category | Local University |
| language | English English English |
| last_indexed | 2025-11-14T17:22:50Z |
| publishDate | 2019 |
| publisher | Borsa Istanbul Anonim Sirketi |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | iium-705542019-08-02T08:23:37Z http://irep.iium.edu.my/70554/ How director remuneration impacts firm performance: an empirical analysis of executive director remuneration in Pakistan azlam, ejaz Haron, Razali Tahir, Muhammad Naveed HG4001 Financial management. Business finance. Corporation finance. This study empirically investigates the interrelationship between pay and performance of CEOs/board of directors in an emerging market, Pakistan. The study uses GMM approach to account for the problem of potential endogeneity and unobserved heterogeneity that arises due to the potential reverse causality (pay and performance) for a sample of non-financial firms listed in the KSE over the period of 2009e2016. This study provides evidence that pays-performance framework supports the agency theory whereby CEOs/board of directors are compensated for their prior level of market-based performance. In addition, pay performance framework weakly support the notion of the steward/tournament theory where the CEOs/board directors pay sensitivity weakly enhanced the firm performance. Thus, CEOs/board director's remuneration is highly persistent and takes time to adjust to long-run equilibrium. Borsa Istanbul Anonim Sirketi 2019-02 Article PeerReviewed application/pdf en http://irep.iium.edu.my/70554/1/70554_How%20director%20remuneration%20impacts%20firm_article.pdf application/pdf en http://irep.iium.edu.my/70554/2/70554_How%20director%20remuneration%20impacts%20firm_scopus.pdf application/pdf en http://irep.iium.edu.my/70554/13/70554_How%20director%20remuneration%20impacts%20firm_wos.pdf azlam, ejaz and Haron, Razali and Tahir, Muhammad Naveed (2019) How director remuneration impacts firm performance: an empirical analysis of executive director remuneration in Pakistan. Borsa Istanbul Review, 19 (2). pp. 186-196. ISSN 2214-8450 https://reader.elsevier.com/reader/sd/pii/S2214845018301248?token=F4657892E75F10C896CF194BA7C2B9F82F5217DAA5386A18CCE4B42CE5BED39C9BC6956966FC8FAAE1BCACB0660043D2 10.1016/j.bir.2019.01.003 |
| spellingShingle | HG4001 Financial management. Business finance. Corporation finance. azlam, ejaz Haron, Razali Tahir, Muhammad Naveed How director remuneration impacts firm performance: an empirical analysis of executive director remuneration in Pakistan |
| title | How director remuneration impacts firm performance: an empirical analysis of executive director remuneration in Pakistan |
| title_full | How director remuneration impacts firm performance: an empirical analysis of executive director remuneration in Pakistan |
| title_fullStr | How director remuneration impacts firm performance: an empirical analysis of executive director remuneration in Pakistan |
| title_full_unstemmed | How director remuneration impacts firm performance: an empirical analysis of executive director remuneration in Pakistan |
| title_short | How director remuneration impacts firm performance: an empirical analysis of executive director remuneration in Pakistan |
| title_sort | how director remuneration impacts firm performance: an empirical analysis of executive director remuneration in pakistan |
| topic | HG4001 Financial management. Business finance. Corporation finance. |
| url | http://irep.iium.edu.my/70554/ http://irep.iium.edu.my/70554/ http://irep.iium.edu.my/70554/ http://irep.iium.edu.my/70554/1/70554_How%20director%20remuneration%20impacts%20firm_article.pdf http://irep.iium.edu.my/70554/2/70554_How%20director%20remuneration%20impacts%20firm_scopus.pdf http://irep.iium.edu.my/70554/13/70554_How%20director%20remuneration%20impacts%20firm_wos.pdf |