Executive compensation: A justified reward or a mis-fortune, an empirical analysis of banks in Pakistan

Waqas Ahmad Watto, Mochammad Fahlevi, Sidra Mehmood, Muhammad Ashar Asdullah, Nendi Juhandi

Research output: Contribution to journalArticlepeer-review

5 Citations (Scopus)

Abstract

The relationship between compensation, performance, and risk in a sample of Pakistani banks, using panel data for 20 banks from 2011 to 2021 has been examined in this research. To the best of researcher's knowledge, this is one of the first study examining the relationship between performance, risk and employee compensation using panel data approach in the context of Pakistan and using data for longer period. To examine the influence of employee compensation on the performance and risk of banks, we employed three performance measures: return on assets, return on equity, and operating profits. Risk assessment was conducted using non-performing loans and risk-weighted assets. Findings of study suggest that employee compensation has no significant impact on performance and risk of banks in Pakistan; this means in Pakistan higher employee's compensation does not enable banks to improve their performance or enable banks to take more risk.
Original languageEnglish
Article number100092
JournalJournal of Open Innovation: Technology, Market, and Complexity
Volume9
Issue number3
Early online date14 Jul 2023
DOIs
Publication statusPublished - Sep 2023
Externally publishedYes

Keywords

  • Executive compensation
  • Non-performing loans
  • Return of assets
  • Return on equity
  • Risk weighted assets

Cite this