Board Of Directors Compensation And Firms Performance: An Evidence From Kse 100 Index
Author: Muhammad Arslan

The study’s goal is to determine the extent to which directors’ salary has an impact on booked based performance of a company (ROA and ROE). Prior studies have given no clear relationships of directors’ compensation and firm performance, so the study is intended to capture the real relationship in scenario of Emerging Economy Pakistan. Unclear relationship between compensation of the board of directors and performance instigates for the research process. The data for the top 50 firms in Pakistan’s non-financial sector has been gathered for the period of 10 years (2010-2019) in order to assess the statistical validity of the hypotheses put out. Following that, the suitable approach, namely generalized method moments (GMM), has been employed, and the desired findings have been attained. The findings indicate that director compensation has a positive and statistically significant impact on return on assets (ROA) while having a negative and statistically significant impact on return on equity (ROE). The findings of the study are valuable to policymakers in their efforts to improve the performance of the firm. The study is also beneficial to the researchers, who may be able to use the findings to help them in their own research. Supervisor:- Dr. Ahmad Fraz

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Keywords : Board compensation, Firm Performance, GMM
Supervisor: Ahmed Fraz

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