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- Title
THE REMUNERATION-PERFORMANCE RELATIONSHIP IN CORPORATE GOVERNANCE: EVIDENCE FROM BOARD MEMBERS' REMUNERATION AND FIRM PERFORMANCE.
- Authors
ÖZER, Gökhan; AKTAŞ, Nagihan; MERTER, Abdullah Kürşat
- Abstract
The board of directors is an important corporate governance mechanism as it is responsible for the operation of a firm and protects the value of the investment made by investors in the firm. Therefore, board members should be supplied with an appropriate incentive to properly discharge their duties. One of the most important incentive mechanisms is remuneration. This study aims to reveal the effect of board members' remuneration on the firm performance. Regression analysis was performed to test the hypotheses. 210 firm-year observations obtained from 76 non-financial firms traded in the BIST 100 between the 2018-2020 period were used. The indicators of firm performance return on assets, return on equity, and earnings per share. As a consequence of the study, the relationship between board members' remuneration and firm performance was found to be positive and statistically significant. These results show that the board members' remuneration is a strong incentive used to increase the firm performance and that a suitable remuneration policy should be established for directors.
- Subjects
CORPORATE directors; RATE of return; EARNINGS per share; ORGANIZATIONAL performance; INCENTIVE (Psychology)
- Publication
Dogus University Journal / Doğuş Üniversitesi Dergisi, 2024, Vol 25, Issue 2, p321
- ISSN
1302-6739
- Publication type
Article
- DOI
10.31671/doujournal.1329041