scholarly journals Directors’ Remuneration and Firm’s Performance: A Study on Malaysian Listed Firm under Consumer Product Industry

2018 ◽  
Vol 11 (5) ◽  
pp. 102 ◽  
Author(s):  
Mohd Waliuddin Mohd Razali ◽  
Ng Sue Yee ◽  
Josephine Yau Tan Hwang ◽  
Akmal Hisham Bin Tak ◽  
Norlina Kadri
Keyword(s):  
Firm Performance ◽  
Listed Companies ◽  
Consumer Products ◽  
Consumer Product ◽  
Future Research ◽  
Firm Age ◽  
Best Interest ◽  
Return On Assets ◽  
Size Firm ◽  
Product Industry

Remuneration is broadly used as an incentive that affects decisions made and strategies planned by directors which cause great impact on firm performance and profitability. This study aims to investigate the directors’ remuneration of the consumer products sector focusing particularly on Malaysian listed companies under Consumer Product Industry. These firm’s performances are measured by return on assets (ROA) and return on equities (ROE). This study consists a sample of 40 Malaysian listed companies for the period of 2012 to 2014. After controlling for board size, CEO duality, firm size, firm age, and leverage; the regression results show director remuneration has positive relationship with firm performance (measured by ROA and ROE). This suggests that high remuneration is able to motivate and retain directors in order to perform their duty and work harder for the best interest of shareholders. The result also shows all variables affect firm performance differently. For future research, we recommend that this study be expanded using more samples from other industries and other measurement of firm performances such as growth and ratings.

scholarly journals How Does Directors’ Remuneration and Board Structure Impact on Firm Performance in Malaysia Telecommunication Industry?

2019 ◽  
Vol 4 (4) ◽  
Author(s):  
Noor Ayuernie Ibrahim ◽  
Noor Nasyikin Md Zin ◽  
Aza Azlina Md. Kassim ◽  
Fazilah Tamsir
Keyword(s):  
Firm Performance ◽  
Negative Relationship ◽  
Listed Companies ◽  
Future Research ◽  
Telecommunication Industry ◽  
Board Structure ◽  
Best Interest ◽  
Return On Assets ◽  
Board Size ◽  
The Relationship

Remuneration is broadly used as an incentive that affects decisions made and strategies planned by directors which cause great impact on firm performance. This study aims to investigate the relationship among directors’ remuneration, board size, and firm performance of Malaysian listed companies under Telecommunication Industry. The firm’s performance is measured by return on assets (ROA). This study consists of 25 observations with a sample of five Malaysian listed companies for the period of 2013 to 2017. The regression results show directors’ remuneration and board size have negative relationship with firm performance. This suggests that high remuneration does not able to motivate and retain directors in order to perform their duty and work harder for the best interest of shareholders. The result also shows that larger boards unable to ensure effectiveness in monitoring management and thus, did not associated with better performance. For future research, it is recommended that this study be expanded using more samples from other industries and other measurement of firm performances such as growth and ratings.

Bridging and bonding: having a Muslim diversity on corporate boards and firm performance

2018 ◽  
Vol 9 (3) ◽  
pp. 457-478 ◽  
Author(s):  
Rohail Hassan ◽  
Maran Marimuthu
Keyword(s):  
Firm Performance ◽  
Muslim Women ◽  
Listed Companies ◽  
Future Research ◽  
Small Scale ◽  
Extensive Literature ◽  
Corporate Boards ◽  
Demographic Diversity ◽  
Content Type ◽  
Diversity Issues

PurposeThis paper aims to examine the demographic diversity at top-level management and its impact on the performance of Malaysian-listed companies. In addition, Muslim diversity on corporate boards is examined. Design/methodology/approachAlthough many organisations aspire to be socially diverse, diversity’s consequences for organisational performance remain unclear. This study specifies the whole distinct mechanism and measures it independently, bridging as the demographic diversity among the board of directors (BODs) and bonding as the firm’s financial performance. To maintain the homogeneity factor, the empirical analysis has been confined to 12 fully fledged sectors and 529 Malaysian listed firms out of 798 firms selected on the basis of judgmental sampling during the period of 2013. The paper applies the correlation matrix and linear regression model to justify this phenomenon. FindingsThe empirical findings suggest that gender diversity (Muslim and Non-Muslim women) is positively significant with firm performance with regards to management, shareholders and market perspectives. It means that both Muslim and non-Muslim women are contributing to firm performance. Ethnic diversity (minority) and Muslim diversity (majority) have no impact on firm performance. On the other hand, interaction variables are positively significant with firm performance. It means that majority and minorities are essential for corporate boards to produce a greater performance. Research limitations/implicationsFuture research could include more variables such as director’s age profile and foreign participation as well as other types of diversities, such as cognitive diversity and corporate diversity. In addition, another possible extension could be the investigation of diversity issues between small scale and large or high and low-profit firms. The findings provide insightful information to firms, as this study suggests that the diverse corporate boards can enhance firm performance. Originality/valueIn recent years, diversity issues have been examined with regard to firm performance of the listed companies. Whilst extensive literature exists on diversity issues, this issue is still under debate and has had inconsistent results. The paper attempts to fill the gap in the existing literature, discuss the empirically diverse corporate boards with the interaction approach and impact on the firm performance.

scholarly journals DO FINANCIAL RATIOS, FIRM CHARACTERISTICS AND CORPORATE GOVERNANCE AFFECT FIRM PERFORMANCE?

2019 ◽  
Vol 20 (1) ◽  
pp. 45-50
Author(s):  
JENNY ◽  
SILVY CHRISTINA
Keyword(s):  
Regression Analysis ◽  
Firm Performance ◽  
Firm Size ◽  
Stock Exchange ◽  
The Other ◽  
Debt Ratio ◽  
Firm Characteristics ◽  
Firm Age ◽  
Board Size ◽  
Size Firm

The purpose of this research is to provide evidence about variables that influence firm performance. These variables are board size, debt ratio, firm size, firm age, return on asset, and independent board. Sample of this research are 67 manufactured companies listed in Indonesia Stock Exchange. The sample selected using purposive method, during the 2013 until 2015. Hypothesis tested by using multiple regression analysis. In this research, firm performance were measured by Tobin’s Q. The result of this research shows that debt ratio, firm size, return on asset and independent board have influence on firm performance. The other variables such as board size and firm age have no influence on firm performance.

Do Independent Directors Improve Firm Performance? Evidence from India

2020 ◽  
pp. 097215092091731
Author(s):  
Supriti Mishra
Keyword(s):  
Firm Performance ◽  
Panel Data ◽  
Firm Size ◽  
Negative Impact ◽  
Negative Relationship ◽  
Independent Directors ◽  
Sample Period ◽  
Firm Age ◽  
Firm Profitability ◽  
Size Firm

With increase in the number of corporate frauds, shareholders, analysts and the general public look forward to IndDirs as the saviours who can help prevent such corporate misdoings. This study attempts to find out if having more IndDirs in the board influences firm profitability. Using panel data consisting of all listed Indian companies in the sample period of 2003–2019, it finds that proportion of IndDirs is negatively related to firm profitability. Control variables—board size, firm size (firmSize), leverage, type of industry (IndType), firm age, ownership, and year 2014—are included in the analysis. Even after arresting their confounding effects on firm performance, negative impact of proportion of IndDirs on firm performance continues. Plausible reasons for this negative relationship are offered. This study has relevance in the wake of mandatory provisions in the Companies Act, 2013 , for presence of IndDirs in the board of Indian firms.

scholarly journals CEO remuneration, board composition and firm performance: empirical evidence from Australian listed companies

2015 ◽  
Vol 13 (1) ◽  
pp. 534-552 ◽  
Author(s):  
Gilbert Ndayisaba ◽  
Abdullahi D. Ahmed
Keyword(s):  
Firm Performance ◽  
Stock Exchange ◽  
Strong Association ◽  
Listed Companies ◽  
Investment Horizon ◽  
Best Interest ◽  
Short Term ◽  
Ceo Pay ◽  
Block Holders

Classical economic theories establishing a relationship between CEO remuneration and firm performance has paid particular attention to solve conflict of interest between managerial team and firm shareholders, by designing an optimum CEO remuneration that motivate executives to work in the best interest of shareholders. Many international and less Australian empirical researches suggest that there is overwhelming evidence that firm performance is strongly linked with CEO remuneration. In this paper, we reassess the association of firm performance and CEO remuneration variables using dynamic econometric models and comprehensive data from Australian Stock Exchange (ASX). We find a positive and strong association between CEO pay of top 200 Australian public listed companies and company performance. Obtained findings are similar to USA, UK and Canada studies results. We further test the effect of board and ownership features on CEO remuneration–performance sensitivity in the top 200 Australian public companies listed on ASX. Specifically, for the period of 2003-2007, our results highlight the importance of ownership structure in influencing remuneration–performance relationship. Monitoring block holders boost the responsiveness of long term incentives (LTI) remuneration to performance, thus straightening shareholder and manager welfares. However, based on a short term investment horizon strategy, insider block holders increase (decrease) the sensitivity of short-term incentives remuneration (long term incentives pay). Surprisingly, for the period 2008-2013, our findings suggest that ownership and board features did not influence significantly CEO pay-performance sensitivities. Finally, we find that larger boards increase (decrease) the responsiveness of CEO’s known remuneration (long term incentives) to performance.

A study of CEO power, pay structure, and firm performance

2013 ◽  
Vol 19 (4) ◽  
pp. 424-453 ◽  
Author(s):  
Chengli Tien ◽  
Chien-Nan Chen ◽  
Cheng-Min Chuang
Keyword(s):  
Firm Performance ◽  
Boards Of Directors ◽  
The United States ◽  
Future Research ◽  
Ceo Power ◽  
Short Term ◽  
Return On Assets ◽  
International Performance ◽  
Ceo Pay

AbstractThis study has extended existing research on CEO power, pay structure, and firm performance, offering models based mainly on agency theory and managerial power theory, and testing hypotheses using data from 112 companies across a five-year span (2001–2005) in computer-related industry groups in the United States. The results indicated that power from executive directorship positively impacts a firm's return on assets and return on equity, and that CEO power from duality negatively impacts CEO long-term pay and total pay, while CEO power from tenure positively impacts CEO long-term pay and pay leverage, and composite power negatively impacts short-term pay. Evidence for CEO pay as a mediator between CEO power and firm performance revealed that CEO short-term pay positively impacts a firm's return on assets and international performance but negatively impacts its market value, regardless of which source of power is being controlled. CEO total pay positively impacts a firm's return on assets and international performance, with power from CEO duality, directorship, or composite power being controlled. Hence, and in general, CEO pay fails to significantly mediate the relationships between CEO power and firm performance. The contributions include a multiple-perspective study of CEO power, compensation, and firm performance to comprehensively discover each of their respective relationships. This study has further extended the debate over agency perspectives with stewardship perspectives to fill knowledge and theoretical gaps. Thus, evidence-based findings provide boards of directors with practical knowledge for sound governance with another avenue for future research in corporate governance.

scholarly journals Firm Size, Firm Age, and Firm Profitability: Evidence from China

2021 ◽  
Vol 28 (1) ◽  
pp. 101
Author(s):  
Md. Jahidur Rahman ◽  
Liu Yilun
Keyword(s):  
Stock Market ◽  
Firm Size ◽  
Fixed Effects ◽  
Negative Relationship ◽  
Future Research ◽  
Fixed Effects Model ◽  
Firm Age ◽  
Public Firms ◽  
Firm Profitability ◽  
Size Firm

This study aims to investigate the relationship among firm size, firm age, and firm profitability in China’s stock market. We use data from all the public firms in China’s stock market from 2008 to 2018 and adopt a fixed effects model to examine these relationships. We find a positive relationship between firm size and profitability and a negative relationship between firm age and profitability, which is consistent with existing studies conducted in other countries. The findings of our study can contribute to future research in China by offering a sound basis and appropriate reference point, given that no previous research has been conducted in China on this exact topic. This study also offers a comprehensive model for use in future studies.

scholarly journals DETERMINAN KINERJA KEUANGAN DENGAN SIZE SEBAGAI MODERASI

2019 ◽  
Vol 3 (2) ◽  
pp. 257-268
Author(s):  
Peni Setiyo Wati ◽  
JMV Mulyadi ◽  
Widarto Rachbini
Keyword(s):  
Firm Size ◽  
Profit Margin ◽  
Total Asset ◽  
Firm Age ◽  
Return On Assets ◽  
Net Profit ◽  
Size Firm ◽  
Asset Turnover

Penelitian ini bertujuan untuk menguji determinan kinerja keuangan dengan firm size sebagai moderasi. Faktor-faktor yang digunakan dalam penelitian ini terdiri dari : total asset turnover, likuiditas, net profit margin, leverage, firm age dan firm size. Firm size diproporsikan sebagai variabel pemoderasi pengaruh total asset turnover, likuiditas, net profit margin, leverage, firm age terhadap kinerja keuangan. Proxy kinerja keuangan dengan menggunakan Return On Assets (ROA). Data penelitian ini diperoleh 208 perusahaan industri manufaktur yang terdaftar di Bursa Efek Indonesia (BEI) periode 2014-2017. Teknik analisis yang digunakan untuk pengujian hipotesis adalah dengan menggunakan program WARP-PLS 6.0. Hasil pengujian menunjukan bahwa total asset turnover, likuiditas, net profit margin, leverage, firm age, memiliki pengaruh signifikan terhadap kinerja keuangan. Firm size tidak memiliki pengaruh signifikan terhadap kinerja keuangan. Firm size memoderasi pengaruh net profit margin, firm age terhadap kinerja keuangan. Firm size tidak memoderasi pengaruh leverage  terhadap kinerja keuangan. Firm size tidak memoderasi pengaruh total asset turnover, likuiditas, leverage terhadap kinerja keuangan.

scholarly journals The influence of the board of directors’ characteristics on firm performance: Evidence from Malaysian public listed companies

2018 ◽  
Vol 2 (1) ◽  
pp. 6-13 ◽  
Author(s):  
Abdulkader Omer Abdulsamad ◽  
Wan Fauziah Wan Yusoff ◽  
Alhashmi Aboubaker Lasyoud
Keyword(s):  
Firm Performance ◽  
Boards Of Directors ◽  
Listed Companies ◽  
Independent Directors ◽  
Return On Assets ◽  
Board Characteristics ◽  
Secondary Sources ◽  
Panel Data Regression ◽  
Data Regression ◽  
The Board Of Directors

This paper aims to investigate the influence of board characteristics on firm performance. The four boards of directors’ characteristics that are of interest in this paper are: CEO duality, independent directors (ID), board size (BS) and board meeting (BM). Return on Assets (ROA) and Earnings per Share (EPS) are used as measurements for firm performance. Data were collected from secondary sources based on a purposively selected sample of 341 Malaysian Public Listed Companies throughout the period ranging from 2003 to 2013. The data were analyzed using the panel data regression model. Results of testing the influences between board characteristics and firm performance are found to be mixed. For example, board meetings showed weak and negative influences on firm performance while independent directors had weak and positive influences only on ROA. Based on the findings of this study, it has been observed that the present listing requirements, which aligned with the assumptions of agency theory, by the Malaysian Code on Corporate Governance (MCCG) and by the Bursa Malaysia requirements, might not be effective as expected in enhancing future firm performance.

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