scholarly journals Examining the relationship between CEO remuneration and performance of major commercial banks in South Africa

2015 ◽  
Vol 13 (1) ◽  
pp. 115-124
Author(s):  
Mahlomola Khumalo ◽  
Andries Masenge
Keyword(s):  
South Africa ◽  
Firm Performance ◽  
Commercial Banks ◽  
Global Financial Crisis ◽  
Banking Industry ◽  
Bank Performance ◽  
Measurement Instruments ◽  
New Perspective ◽  
And Performance ◽  
The Relationship

The relationship between CEO remuneration and firm performance continues to receive much attention. Although the focus of most of the studies is across sectors, attention is increasingly being directed towards the banking industry. At the same time, controversy around what is deemed excessive remuneration of CEOs in the light of not so impressive firm performance across sectors continues. The 2008 global financial crisis and subsequent problems in the banking industry have increased interest in the dynamics of CEO remuneration and bank performance. This study, which examines the relationship between CEO remuneration and bank performance in South Africa, aims to bring a new perspective to the on-going research and debate. The data used is for the years 2008 – 2013, and a purposive sampling method was employed to select a sample frame that consists of five major commercial banks in South Africa. The results suggest that not all measurement instruments used confirmed that a relationship between CEO remuneration and bank performance existed. In the overall, the results of the study do show that the remuneration of the CEO in the banking industry is such that it does have a significant influence on the performance of a bank.

scholarly journals Corporate governance and performance of listed commercial banks in South Africa

2014 ◽  
Vol 11 (2) ◽  
pp. 677-687
Author(s):  
Sam Ngwenya
Keyword(s):  
South Africa ◽  
Corporate Governance ◽  
Commercial Banks ◽  
Global Financial Crisis ◽  
The United States ◽  
Executive Directors ◽  
Governance Indicators ◽  
And Performance ◽  
The Global Financial Crisis ◽  
The Relationship

The global financial crisis of 2008 that resulted in the collapse of many financial institutions in the United States (US) and Europe have resulted in debates over the failures of corporate governance structures to properly protect investors. The main objective of the study was to determine the relationship between corporate governance and performance of listed commercial banks in South Africa. The results of the study indicated a statistically positive significant relationship between board size, proportion of non-independent and non-executive directors and bank performance. The results of the rest of the corporate governance indicators are mixed when using different performance measurement variables.

scholarly journals Managerial Perception of Human Capital, Innovations, and Performance: Evidence from Banking Industry

2021 ◽  
Vol 32 (5) ◽  
pp. 446-458
Author(s):  
Nela Milosevic ◽  
Marina Dobrota ◽  
Veljko Dmitrovic ◽  
Sladjana Barjaktarovic Rakocevic
Keyword(s):  
Human Capital ◽  
Banking Industry ◽  
Multiple Regression Model ◽  
Bank Performance ◽  
Two Phase ◽  
Bank Management ◽  
General Managers ◽  
Managerial Perception ◽  
And Performance ◽  
The Relationship

This paper aims to examine the relationship between the managerial perception of human capital, innovations, and bank performance. We specifically sought to examine the influence of human capital on bank performance, by introducing the factors of innovation speed and quality. The study was taken in the Serbian banking industry, with the focus on the perception and the viewpoint of CEOs and general managers of different departments. We used a two-phase survey to design the questionnaire and the correlation and regression analyses to examine our hypotheses. Our findings propose that, from managers’ perspective, human capital is critical to the success of banks, and that innovation speed is more influential than its quality. The backward multiple regression model shows that human capital and innovation speed account for 67.5% of the variability of the bank performance. The findings of this research can contribute to bank management policies by revealing how to enhance bank performance by focusing on human capital and innovation agility and readiness. The proposed research model could potentially be implemented in other sectors and industries to hopefully endorse the significance of the detected relationships.

scholarly journals Liquidity creation and bank performance: evidence from MENA

2019 ◽  
Vol 11 (1) ◽  
pp. 27-45 ◽  
Author(s):  
Ahmad Sahyouni ◽  
Man Wang
Keyword(s):  
Commercial Banks ◽  
Data Availability ◽  
Bank Performance ◽  
Islamic Banks ◽  
Content Type ◽  
Mena Countries ◽  
And Performance ◽  
Conventional Banks ◽  
The Relationship ◽  
Conventional And Islamic Banks

Purpose Islamic banks have significantly different balance sheets from their conventional counterparts, leading to different implications in relation to liquidity creation compared to conventional banks. This work, first, investigates the liquidity creation of conventional and Islamic banks in Middle Eastern and North African (MENA) countries between 2011 and 2016. It then tests the relationship between liquidity creation and performance of these banks. Design/methodology/approach It uses the data of 491 commercial banks across 18 MENA countries between 2011 and 2016. The analysis is based on panel data techniques. Findings The banks created US$18.596 trillion of liquidity, about 28.4% of total assets. Conventional banks created more liquidity compared with Islamic banks. Nevertheless, Islamic banks created more liquidity per asset compared with conventional banks. The regression analysis revealed a significant and negative correlation between liquidity creation and performance of the banks using return on average equity (ROAE) measure. However, no significant relationship is observed between liquidity creation and return on average assets (ROAA) of MENA banks. Moreover, there is no difference between Islamic and conventional banks in the relation between liquidity creation and bank performance. Research limitations/implications The data are limited to the period 2011-2016; the period of this study was selected based on yearly data availability from the data source. Accounting measures were used to study the effect of liquidity creation on bank profitability, and the market-based measures were excluded, as there is no uniform sources in these countries that can be used to collect market-based data. Practical implications Bank managers must reach a trade-off between the advantages and disadvantages of liquidity creation, as well as consider the negative relationship between liquidity creation and bank performance when making their decisions. Originality/value First, to the best of the authors’ knowledge, this work is the first to analyse the relationship between the liquidity creation and performance of conventional and Islamic banks in MENA. Second, this study uses a sample of Islamic and conventional banks in MENA that have detailed information on the Orbis Bank Focus dataset, which is the most comprehensive database of commercial banks in the MENA region.

scholarly journals EXPRESS: Unbundling the Effects of Internationalization on Firm Performance in Emerging Economies: The Moderating Effects of Strategic Resource Decisions

2021 ◽  
pp. 1069031X2110306
Author(s):  
Nilay Bicakcioglu-Peynirci ◽  
Robert E. Morgan
Keyword(s):  
Firm Performance ◽  
Emerging Economies ◽  
Emerging Market ◽  
Strategic Marketing ◽  
Slack Resources ◽  
Moderation Effect ◽  
Strategic Resource ◽  
And Performance ◽  
Resource Decisions ◽  
The Relationship

We investigate how strategic resource decisions—concerning slack resources and strategic marketing ambidexterity—influence the relationship between internationalization and firm performance of emerging market firms. Based upon the resource-based view, we synthesize two dominant, yet divergent, perspectives that explain the respective resource slack advantages and liabilities in the internationalization literature: the flexible capacity and the efficient capacity perspectives. We also explore the moderating role of strategic marketing ambidexterity which comprises a bundle of marketing activities covering both exploitation-dominant actions and exploration-dominant actions. We empirically examine our hypothesized relationships with data from a sample of 1,683 firm-year observations for the period between 2005 and 2018 and find that distinct forms of resource slacks have contrasting effects on the relationship between internationalization and performance. Our results provide strong evidence for positive moderation effect of unabsorbed slack resources and a negative moderation effect of absorbed slack resources on the internationalization-performance relationship. We also indicate nonsignificant moderating effect of strategic marketing ambidexterity, demonstrating that internationalization attains higher firm performance regardless of its exploration-dominant or exploitation-dominant strategic emphasis in emerging economies.

scholarly journals Analysis of Information Systems Capabilities and Performance of Firms in Telecommunications Industry, Kenya

2018 ◽  
Vol 6 (04) ◽  
pp. 319-327
Author(s):  
Bett, Alfred Kipyegon ◽  
Dr. Johnmark Obura ◽  
Dr. Moses Oginda
Keyword(s):  
Information Systems ◽  
Firm Performance ◽  
Telecommunications Industry ◽  
Policy Formulation ◽  
Primary Data ◽  
Executive Management ◽  
Economic Role ◽  
And Performance ◽  
Service Businesses ◽  
The Relationship

In the 21st century where economies are driven majorly by knowledge and information-based service businesses, telecommunication industries are playing a critical economic role both regionally and globally. In Kenya, with a combined subscription rate of 37.8 million based on a 2016/17 Communication Authority of Kenya report of 2017, Safaricom Kenya Limited controls about 71.2% of the subscribers, Airtel Kenya Limited is second with 17.6% with Telkom Kenya coming third with 7.4%. Finserve East Africa (Equitel) a new entrant in the market controls 3.8% of subscribers. These figures points to the fact that only Safaricom seems to be the only firm performing well. This reality forms the basis of establishing whether their difference in performance is attributable to their information systems capabilities. The purpose of this study was to analyse the relationship IS capabilities and performance of firms in the telecommunications industry in Kenya. It was anchored on Resource-Based Theory and guided by a conceptual framework with the dependent variable being firm performance while independent variable was IS capabilities. Correlational and survey research designs were used. The population of the study was 408 staff comprising all executive, management and operational level managers from the business and IT sections in each firm. A sample of 202 staff was drawn through proportionate stratified random sampling method. Primary data was collected using structured questionnaire and an interview schedule. Reliability of the research instrument was tested against Cronbach’s alpha coefficient where a reliability score of 0.814 was achieved while validity was gauged through research experts’ opinions. Data was analysed using both descriptive and inferential statistics. The findings established that IS capabilities and firm performance have a weak relationship (r = 0.409, p<0.05) which means that whenever firms in industry invested on market based IS capabilities there was a small improvement on their performance and therefore firms should invest in the development of market based IS capabilities since they have significant influence on their performance. This study may be useful to industry players by gaining better understanding on various information system resources that they can utilize to improve and sustain their performance besides policy formulation. By advancing a model that depicts the relationship between information systems resources and firm performance, this study may make a significant contribution to theory building in the field of information systems.

scholarly journals Intellectual Capital and Firm Performance across Pakistani Industries

2021 ◽  
Vol 11 (4) ◽  
pp. 56
Author(s):  
Muhammad Ahmad ◽  
Rohani Mohd Rus
Keyword(s):  
Firm Performance ◽  
Intellectual Capital ◽  
Value Added ◽  
Service Industries ◽  
Financial Firms ◽  
Generalized Methods Of Moments ◽  
Capital Efficiency ◽  
And Performance ◽  
Methods Of Moments ◽  
The Relationship

This study sheds light on the differences in intellectual capital (IC) efficiencies across non-financial sectors in Pakistan and determines the relationship between IC and firm performance. The study used sample of 155 non-financial firms from the manufacturing and service industries of Pakistan for the period 2009-2018. This study contributes to IC research by applying modified value-added intellectual capital (MVAIC) model with relationship to firm performance (return on assets and Tobin’s Q) of Pakistani non-financial firms which was overlooked by the previous researchers. In addition, to deal with endogeneity, the dynamic panel generalized methods of moments regression is applied to test the relationship between IC and performance. Findings provide evidence that different sectors in non-financial industries manage IC components differently. IC increases both market-based performance and accounting-based performance of Pakistani firms. Among all IC components, human capital efficiency is an important determinant of firm performance. The implication can provide help managers and investors to understand the IC to increase the firm performance.

scholarly journals CEO compensation and performance of state owned enterprises in South Africa

2012 ◽  
Vol 10 (1) ◽  
pp. 97-109 ◽  
Author(s):  
Sam Ngwenya ◽  
Mahlomolo Khumalo
Keyword(s):  
South Africa ◽  
Ceo Compensation ◽  
Positive Relationship ◽  
Board Members ◽  
Total Revenue ◽  
Return On Assets ◽  
Base Salary ◽  
And Performance ◽  
Using Data ◽  
The Relationship

The study investigates the relationship between CEO compensation and performance of State Owned Enterprises (SOEs) in South Africa, using data for the period 2009 to 2011. The results indicated that there exist no positive relationship between CEO compensation and SOEs performance as measured by return on assets. The results also indicated a positive relationship between CEO compensation (base salary) and the size of SOEs as measured by total revenue and number of employees. The results suggest that board members of SOEs in South Africa should hold CEOs accountable for the performance of SOEs, and should not pay huge salaries and bonuses to non performing CEOs.

Aliansi Strategis dan Kinerja Perusahaan: Perspektif Teori Institusional

2020 ◽  
Vol 1 (2) ◽  
pp. 83-90
Author(s):  
Rebi Fara Handika
Keyword(s):  
Firm Performance ◽  
Institutional Theory ◽  
Empirical Research ◽  
Strategic Alliances ◽  
Strategic Alliance ◽  
Point Of View ◽  
Theory Point ◽  
And Performance ◽  
The Relationship

Abstract   This paper discussed the company's motive to join a strategic alliance from the institutional theory point of view. The theory views that strategic alliances are considered as the medium to acquire legitimation from the environment. Such legitimation then improves the company’s competitive positions and performance. Further, we propose the framework to discuss the relationship between strategic alliances and a company’s performance. The paper proceeds as follows: in the next section, we discuss the institutional theory, the strategic alliance, and firm performance. Afterward, we develop the propositions and discuss the implications for future empirical research.   Abstrak   Artikel ini membahas motif perusahaan untuk bergabung dengan aliansi strategis dari sudut pandang teori institusional. Teori ini memandang bahwa aliansi strategis dianggap sebagai media untuk memperoleh legitimasi dari lingkungan. Legitimasi tersebut kemudian dipercayai akan meningkatkan posisi kompetitif dan kinerja perusahaan. Selanjutnya, kami mengusulkan framework untuk membahas hubungan antara aliansi strategis dan kinerja perusahaan. Artikel ini akan dilanjutkan sebagai berikut: pada bagian berikutnya, kita membahas teori institusional, aliansi strategis, dan kinerja perusahaan. Setelah itu, kami mengembangkan proposisi dan membahas implikasi untuk penelitian empiris di masa depan.

Loan Loss Provisions and Earnings Management in Malaysian Banking Industry

2013 ◽  
Vol 1 (1) ◽  
pp. 93-104
Author(s):  
Hasni Abdullah ◽  
Imbarine Bujang ◽  
Ismail Ahmad
Keyword(s):  
Earnings Management ◽  
Commercial Banks ◽  
Global Financial Crisis ◽  
Banking Industry ◽  
Least Square ◽  
Capital Management ◽  
Loan Loss ◽  
Macroeconomic Factors ◽  
Ordinary Least Square ◽  
Loan Loss Provisions

Objective The main purpose of the study is to investigate the presence of earnings management incentive in affecting the LLP decision of commercial banks in Malaysia, focusing on the relation between loan loss provisions and earnings before tax and provisions. Methodology/Technique This study applies the pooled Ordinary Least Square model in assessing the determinants of the LLP. Findings The empirical findings clearly indicate that the LLP in Malaysian commercial banks is affected by earnings management for that particular period Type of Paper: Empirical paper Novelty : The expansion of the existing research in Malaysia in order to examine the extent to which the Malaysian banks engage in earnings and capital management, extends the period of investigation by considering the recent global financial crisis 2007-2009. Keywords: Loan Loss Provisions; Earnings Management; Capital Management; Macroeconomic Factors; Commercial Banks.

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