EXECUTIVE REMUNERATION AND COMPANY PERFORMANCE

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Abstract

Executive remuneration has been the subject of close scrutiny, huge public outcries and criticisms in the recent past in South Africa. This has invariably attracted unprecedented research interest across different sectors of the economy. Various studies on executive remuneration versus corporate performance have been conducted across South African companies with no finite consensus. This study joins the debate with the hope of reaching common understanding on the relationship between the two variables. The study seeks to investigate the relationship between CEO remuneration and company performance on the Johannesburg Stock Exchange Listed (JSE) Companies from 2010 to 2015. In particular, the focus of the study was to determine if these two constructs were correlated and aligned with the corporate governance principles. The study, employed a deductive methodological approach, based on a longitudinal, descriptive quantitative design. Purposive sampling technique was used to select the actively listed companies that met the prescribed criteria. Secondary data, sourced from McGregor BFA database was used for the study. Data analysis took an archival quantitative research approach. Regression and time series statistical analyses were performed on secondary data on CEO remuneration and company performance metrics. The findings confirmed the existence of a positive relationship between CEO remuneration and company performance in South Africa as hinted by previous studies.

Keywords: Corporate Governance, Chief Executive Officer, Johannesburg Stock Exchange, Organisational Performance and Global Recession

Received: 13.06.2017

Accepted: 28.08.2017

How to cite this paper: Ndlovu, V., Mutambara, E., & Assensoh-Kodua, A. (2017). Executive remuneration and company performance. Corporate Ownership & Control, 15(1-1), 253-264. https://doi.org/10.22495/cocv15i1c1p9