Corporate Governance, Executive Pay and Firm Performance: Evidence from Bangladesh

Rashid, Afzalur
June 2013
International Journal of Management;Jun2013, Vol. 30 Issue 2 Part 1, p556
Academic Journal
This study examines the relationship between executive pay and firm performance in Bangladesh. While doing so it examines the ownership structure and board practices on executive pay and pay-performance sensitivity. It is found that there is no significant relationship between ownership structure and executive pay. There is a significant positive relationship between board composition and executive pay; there is a significant negative relationship between board size and executive pay and CEO duality and executive pay. However, there is a positive relationship between executive pay and firm performance. These findings imply that the executives who have significant ownership stakes in the firm are not necessarily extracting rent in the form of executive pay even though they have a consolidation of powers (CEO duality). Insider representation in the board and management along with the consolidation of powers may have reduced the need for performance related pay and their monitoring skill may have allowed enhancing firm economic performance.


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