Exploring the Association Between Chief Executive Remuneration and Financial Performance: A South African Banking Perspective
DOI:
https://doi.org/10.33423/jaf.v24i4.7301Keywords:
accounting, finance, banking sector, CEO remuneration, financial performance, corporate governance, chief executive officersAbstract
This research aimed to determine whether there is an association between financial performance and chief executive officer (CEO) remuneration when South African banks are sampled. A quantitative research approach was applied using a descriptive research design. The research included a data range spanning over 10 years. Financial data were collected through the Integrated Real-time Equity System (IRESS). Multiple regression testing was performed using the Statistical Package for Social Science (SPSS). Correlation coefficients were measured, and multiple regression models were constructed. This study found that cashflow per share, market price per share and liquidity ratios were often identified as predictors of CEO remuneration. This research contributed to the body of existing knowledge by demonstrating that the remuneration paid to South African bank CEOs can be predicted by means of selected financial ratios. Limitations included that the census was small and only consisted of eight banks in total. This limitation was accommodated by expanding the time frame for data collection.
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