Director Remuneration And Firm Performance :  A Study On Malaysian Listed Firms In Consumer Products Sector

Ng, Sue Yee (2017) Director Remuneration And Firm Performance :  A Study On Malaysian Listed Firms In Consumer Products Sector. [Final Year Project Report] (Unpublished)

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Abstract

Remuneration is broadly used as an incentive that affects decision made and strategies plan by directors which cause great impact on firm performance and profitability. The main objective of the study is to investigate the director remuneration of the consumer products sector focusing particularly on Malaysia listed companies toward firm performances in terms of economic value added (EV A), return on assets (ROA) and return on equities (ROE). A total of 40 samples of Malaysia listed companies for the period of 2011 to 2013 were obtained and examined. After controlling such as board size, CEO duality, firm size, firm age and leverage the regression results showed director remuneration had positive relationship with firm performance in terms of EV A, ROA and ROE. The result provided evidence that there was positive significant relationship between director remuneraiton and firm performance in terms of ROE. This suggest that high remuneraation able to motivate and retain directors in order to perform their duty and work harder for the best interest of shareholders. No significant relationship could be established between board size and firm performance. The result also shows CEO duality, firm size and leverage has negative significant relationship with firm performance. In contrast, there is positive significant relationship between firm age I and firm performance. For future research, this paper recommend study being expand using other measurement of firm performance such as growth and ratings

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