EXECUTIVE COMPENSATION AND FINANCIAL PERFORMANCE OF LISTED BANKS IN NIGERIA: MODERATING ROLE OF HUMAN CAPITAL

Abstract

Objective: The study is on the role of human capital on the relationship between executive compensation and financial performance of banks in Nigeria from 2008 to 2022. The work studies the moderating role of human capital on the relationship between executive compensation and financial performance of listed banks in Nigeria.   Method: In establishing the relationship, correlational research design was employed. The research encompasses listed banks in Nigerian for the period of study. Utilizing secondary data from annual reports and accounts, a panel regression was employed to test the hypotheses. The study was supported by pay-performance theory on the financial performance measure as NIM.   Results: The findings reveal that highest paid director have a negative and significant relationship with financial performance of banks in Nigeria. In the same vein, the study establishes a positive relationship between total compensation and financial performance. However, human capital moderates the relationship between total compensation and financial performance of banks in Nigeria negatively.   Conclusion: The study's findings yield recommendations for enhancing financial performance of Nigerian banks. There is need for control on executive compensation of banks as these are vital to the financial performance of banks in Nigeria.