Directors' remuneration and firm performance : Malaysian evidence / Salleh Hassan, Theo Christopher and Robert Evans

The issue of board of directors' remuneration, a subset of senior management compensation, has been a matter of continuing debate and examination primarily in Western economies. However, since on the onset of the 1997 Asian financial crisis, the issue of directors' remuneration has caught...

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Main Authors:	Hassan, Salleh, Theo, Christopher
Format:	Article
Language:	English
Published:	Faculty of Accountancy & Accounting Research Institute (ARI) 2003
Subjects:	Malaysia
Online Access:	http://ir.uitm.edu.my/id/eprint/13689/ http://ir.uitm.edu.my/id/eprint/13689/1/AJ_SALLEH%20HASSAN%20MAR%2003.pdf

id	uitm-13689
recordtype	eprints
spelling	uitm-136892016-07-21T08:10:58Z http://ir.uitm.edu.my/id/eprint/13689/ Directors' remuneration and firm performance : Malaysian evidence / Salleh Hassan, Theo Christopher and Robert Evans Hassan, Salleh Theo, Christopher Malaysia The issue of board of directors' remuneration, a subset of senior management compensation, has been a matter of continuing debate and examination primarily in Western economies. However, since on the onset of the 1997 Asian financial crisis, the issue of directors' remuneration has caught the attention of corporate stakeholders of the crisis-affected economies. The objective of the present study is to explore the relationship between Malaysian directors' remuneration and firm performance. The current study proposes that the relationship between directors' remuneration and firm performance will be a positive one. However, this relationship is argued to be a weak one because of the prevailing corporate governance structures in Malaysia, which are different from that of the Western economies. This argument implicitly implies that the normal agency and efficient contracting predictions are not applicable to the extent that generally directors of Malaysian listed companies would be indifferent towards the matter. From a sample of 100 listed companies throughout the period from 1996 to 1998, it has been found that there has been positive but weak relationship between current year directors' remuneration and current year internal growth measures and financial performance indicators. Further, the evidence shows an even weaker relationship between directors' remuneration and financial performance than that between directors' remuneration and internal growth measures for all the 3 years from 1996 to 1998. From the lag-effect analysis, the conclusion is consistent with the current year analysis. However, the strength of the relationship reported by the lag-effect analysis is generally stronger than that reported using the current year analysis. Faculty of Accountancy & Accounting Research Institute (ARI) 2003 Article PeerReviewed text en http://ir.uitm.edu.my/id/eprint/13689/1/AJ_SALLEH%20HASSAN%20MAR%2003.pdf Hassan, Salleh and Theo, Christopher (2003) Directors' remuneration and firm performance : Malaysian evidence / Salleh Hassan, Theo Christopher and Robert Evans. Malaysian Accounting Review, 2 (1). pp. 57-67. ISSN 1675-4077
repository_type	Digital Repository
institution_category	Local University
institution	Universiti Teknologi MARA
building	UiTM Institutional Repository
collection	Online Access
language	English
topic	Malaysia
spellingShingle	Malaysia Hassan, Salleh Theo, Christopher Directors' remuneration and firm performance : Malaysian evidence / Salleh Hassan, Theo Christopher and Robert Evans
description	The issue of board of directors' remuneration, a subset of senior management compensation, has been a matter of continuing debate and examination primarily in Western economies. However, since on the onset of the 1997 Asian financial crisis, the issue of directors' remuneration has caught the attention of corporate stakeholders of the crisis-affected economies. The objective of the present study is to explore the relationship between Malaysian directors' remuneration and firm performance. The current study proposes that the relationship between directors' remuneration and firm performance will be a positive one. However, this relationship is argued to be a weak one because of the prevailing corporate governance structures in Malaysia, which are different from that of the Western economies. This argument implicitly implies that the normal agency and efficient contracting predictions are not applicable to the extent that generally directors of Malaysian listed companies would be indifferent towards the matter. From a sample of 100 listed companies throughout the period from 1996 to 1998, it has been found that there has been positive but weak relationship between current year directors' remuneration and current year internal growth measures and financial performance indicators. Further, the evidence shows an even weaker relationship between directors' remuneration and financial performance than that between directors' remuneration and internal growth measures for all the 3 years from 1996 to 1998. From the lag-effect analysis, the conclusion is consistent with the current year analysis. However, the strength of the relationship reported by the lag-effect analysis is generally stronger than that reported using the current year analysis.
format	Article
author	Hassan, Salleh Theo, Christopher
author_facet	Hassan, Salleh Theo, Christopher
author_sort	Hassan, Salleh
title	Directors' remuneration and firm performance : Malaysian evidence / Salleh Hassan, Theo Christopher and Robert Evans
title_short	Directors' remuneration and firm performance : Malaysian evidence / Salleh Hassan, Theo Christopher and Robert Evans
title_full	Directors' remuneration and firm performance : Malaysian evidence / Salleh Hassan, Theo Christopher and Robert Evans
title_fullStr	Directors' remuneration and firm performance : Malaysian evidence / Salleh Hassan, Theo Christopher and Robert Evans
title_full_unstemmed	Directors' remuneration and firm performance : Malaysian evidence / Salleh Hassan, Theo Christopher and Robert Evans
title_sort	directors' remuneration and firm performance : malaysian evidence / salleh hassan, theo christopher and robert evans
publisher	Faculty of Accountancy & Accounting Research Institute (ARI)
publishDate	2003
url	http://ir.uitm.edu.my/id/eprint/13689/ http://ir.uitm.edu.my/id/eprint/13689/1/AJ_SALLEH%20HASSAN%20MAR%2003.pdf
first_indexed	2023-09-18T22:50:11Z
last_indexed	2023-09-18T22:50:11Z
_version_	1777417491785449472

Directors' remuneration and firm performance : Malaysian evidence / Salleh Hassan, Theo Christopher and Robert Evans

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