The robust and expensive lifestyles of bank executive directors have drawn negative criticisms stakeholders in the banking sector. This was particularly so when the performance of such banks were not at par with their lifestyles. This study was therefore conducted to investigate the effect of pay packages offered to executive directors on the financial performance of deposit money banks. The main objective of the study was to determine whether compensations packages made to the executive directors in deposit money banks are able to motivate them to better productivity. Executive compensation was proxied by cash, bonus, stock and perquisites of office compensation. The dependent variable was proxied by return on liquid asset. The study used ex-post facto research design. Data were extracted from the financial statements of five randomly selected deposit money banks in Nigeria for years 2015 to 2019. The data were analysed with correlation and regression models and SPSS version 20 was used to analyse the data. The results of analysis show that the return on liquid asset were significant and positively related to various proxies of executive compensation. However, though the result shows a positive relationship between cash compensation and return on liquid asset, it was not significant. The study concluded that compensation packages made to the executive is significantly related to the financial performance of deposit money banks. The study recommends amongst others that a uniform compensation packages be developed for all deposit money banks by the regulatory authority in Nigeria.
Citation: Okpo S.A., Eshiet U.E., and Emenyi, E.O. (2023) Remuneration Packages of Executive Directors and Financial Performance of Money Deposit Banks: Evidence from Nigeria, Global Journal of Human Resource Management, Vol.11, No.1, pp.1-12
Keywords: Executive Compensation, perquisites of office, return on liquid asset
