Influence of Firm Size on CEOs Compensation

Omamo Anne; Peter K’obonyo; Florence Muindi

doi:doi:10.11648/j.jbed.20210601.13

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Influence of Firm Size on CEOs Compensation

Omamo Anne, Peter K’obonyo, Florence Muindi

Published in Journal of Business and Economic Development (Volume 6, Issue 1)

Received: 5 February 2021 Accepted: 17 February 2021 Published: 27 February 2021

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Abstract

This study focused its attention to the link among firm size and CEO compensation of firms listed at the NSE. Previous researchers have identified firm’s characteristics that influence the firm’s ability to perform. The identified characteristics include firm size, age, reputation and legitimacy. A firm’s characteristics could be described through reference to resources the firm owns and by the organization’s objectives. Previous researches examined the factors influencing CEO compensation revealed a lack of consensus to the explanation of increases in CEO’S compensation. While most of the studies confirm linkages between organizational performance and CEO compensation, they measured organizational performance using financial indicators of performance, this study investigates the link between firm size and CEOs compensation. The study’s population constituted 40 firms listed at the NSE. A mixed design was adopted in the study. Primary data was gathered to capture the opinion of board members on firm size characteristics that determine levels of CEO’S compensation using semi structured questionnaire. Secondary sources of data were used to gather information on financial performance from the financial statement of the listed organizations for 2016-2017 financial periods. Descriptive statistics, correlations, linear, multiple and stepwise regression were applied in analyzing and interpreting the data that was collected. The research revealed that there was significant and positive relationship between firm size and CEOs compensation. The findings of this study are of benefit to board members of organizations in identifying the performance measures that are important to consider when making decisions on CEO remuneration.

Published in	Journal of Business and Economic Development (Volume 6, Issue 1)
DOI	10.11648/j.jbed.20210601.13
Page(s)	23-29
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2021. Published by Science Publishing Group

Keywords

Firm Size, CEO Compensation, Nairobi Securities Exchange, Performance, Firm Characteristics

References

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APA Style

Omamo Anne, Peter K’obonyo, Florence Muindi. (2021). Influence of Firm Size on CEOs Compensation. Journal of Business and Economic Development, 6(1), 23-29. https://doi.org/10.11648/j.jbed.20210601.13

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ACS Style

Omamo Anne; Peter K’obonyo; Florence Muindi. Influence of Firm Size on CEOs Compensation. J. Bus. Econ. Dev. 2021, 6(1), 23-29. doi: 10.11648/j.jbed.20210601.13

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AMA Style

Omamo Anne, Peter K’obonyo, Florence Muindi. Influence of Firm Size on CEOs Compensation. J Bus Econ Dev. 2021;6(1):23-29. doi: 10.11648/j.jbed.20210601.13

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@article{10.11648/j.jbed.20210601.13,
  author = {Omamo Anne and Peter K’obonyo and Florence Muindi},
  title = {Influence of Firm Size on CEOs Compensation},
  journal = {Journal of Business and Economic Development},
  volume = {6},
  number = {1},
  pages = {23-29},
  doi = {10.11648/j.jbed.20210601.13},
  url = {https://doi.org/10.11648/j.jbed.20210601.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jbed.20210601.13},
  abstract = {This study focused its attention to the link among firm size and CEO compensation of firms listed at the NSE. Previous researchers have identified firm’s characteristics that influence the firm’s ability to perform. The identified characteristics include firm size, age, reputation and legitimacy. A firm’s characteristics could be described through reference to resources the firm owns and by the organization’s objectives. Previous researches examined the factors influencing CEO compensation revealed a lack of consensus to the explanation of increases in CEO’S compensation. While most of the studies confirm linkages between organizational performance and CEO compensation, they measured organizational performance using financial indicators of performance, this study investigates the link between firm size and CEOs compensation. The study’s population constituted 40 firms listed at the NSE. A mixed design was adopted in the study. Primary data was gathered to capture the opinion of board members on firm size characteristics that determine levels of CEO’S compensation using semi structured questionnaire. Secondary sources of data were used to gather information on financial performance from the financial statement of the listed organizations for 2016-2017 financial periods. Descriptive statistics, correlations, linear, multiple and stepwise regression were applied in analyzing and interpreting the data that was collected. The research revealed that there was significant and positive relationship between firm size and CEOs compensation. The findings of this study are of benefit to board members of organizations in identifying the performance measures that are important to consider when making decisions on CEO remuneration.},
 year = {2021}
}

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TY - JOUR
T1 - Influence of Firm Size on CEOs Compensation
AU - Omamo Anne
AU - Peter K’obonyo
AU - Florence Muindi
Y1 - 2021/02/27
PY - 2021
N1 - https://doi.org/10.11648/j.jbed.20210601.13
DO - 10.11648/j.jbed.20210601.13
T2 - Journal of Business and Economic Development
JF - Journal of Business and Economic Development
JO - Journal of Business and Economic Development
SP - 23
EP - 29
PB - Science Publishing Group
SN - 2637-3874
UR - https://doi.org/10.11648/j.jbed.20210601.13
AB - This study focused its attention to the link among firm size and CEO compensation of firms listed at the NSE. Previous researchers have identified firm’s characteristics that influence the firm’s ability to perform. The identified characteristics include firm size, age, reputation and legitimacy. A firm’s characteristics could be described through reference to resources the firm owns and by the organization’s objectives. Previous researches examined the factors influencing CEO compensation revealed a lack of consensus to the explanation of increases in CEO’S compensation. While most of the studies confirm linkages between organizational performance and CEO compensation, they measured organizational performance using financial indicators of performance, this study investigates the link between firm size and CEOs compensation. The study’s population constituted 40 firms listed at the NSE. A mixed design was adopted in the study. Primary data was gathered to capture the opinion of board members on firm size characteristics that determine levels of CEO’S compensation using semi structured questionnaire. Secondary sources of data were used to gather information on financial performance from the financial statement of the listed organizations for 2016-2017 financial periods. Descriptive statistics, correlations, linear, multiple and stepwise regression were applied in analyzing and interpreting the data that was collected. The research revealed that there was significant and positive relationship between firm size and CEOs compensation. The findings of this study are of benefit to board members of organizations in identifying the performance measures that are important to consider when making decisions on CEO remuneration.
VL - 6
IS - 1
ER -

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Author Information

Omamo Anne

School of Business, Jomo Kenyatta University of Agriculture and Technology, Nairobi, Kenya
Peter K’obonyo

School of Business, University of Nairobi, Nairobi, Kenya
Florence Muindi

School of Business, University of Nairobi, Nairobi, Kenya

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Plain Text BibTeX RIS

APA Style

Omamo Anne, Peter K’obonyo, Florence Muindi. (2021). Influence of Firm Size on CEOs Compensation. Journal of Business and Economic Development, 6(1), 23-29. https://doi.org/10.11648/j.jbed.20210601.13

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ACS Style

Omamo Anne; Peter K’obonyo; Florence Muindi. Influence of Firm Size on CEOs Compensation. J. Bus. Econ. Dev. 2021, 6(1), 23-29. doi: 10.11648/j.jbed.20210601.13

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AMA Style

Omamo Anne, Peter K’obonyo, Florence Muindi. Influence of Firm Size on CEOs Compensation. J Bus Econ Dev. 2021;6(1):23-29. doi: 10.11648/j.jbed.20210601.13

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@article{10.11648/j.jbed.20210601.13,
  author = {Omamo Anne and Peter K’obonyo and Florence Muindi},
  title = {Influence of Firm Size on CEOs Compensation},
  journal = {Journal of Business and Economic Development},
  volume = {6},
  number = {1},
  pages = {23-29},
  doi = {10.11648/j.jbed.20210601.13},
  url = {https://doi.org/10.11648/j.jbed.20210601.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jbed.20210601.13},
  abstract = {This study focused its attention to the link among firm size and CEO compensation of firms listed at the NSE. Previous researchers have identified firm’s characteristics that influence the firm’s ability to perform. The identified characteristics include firm size, age, reputation and legitimacy. A firm’s characteristics could be described through reference to resources the firm owns and by the organization’s objectives. Previous researches examined the factors influencing CEO compensation revealed a lack of consensus to the explanation of increases in CEO’S compensation. While most of the studies confirm linkages between organizational performance and CEO compensation, they measured organizational performance using financial indicators of performance, this study investigates the link between firm size and CEOs compensation. The study’s population constituted 40 firms listed at the NSE. A mixed design was adopted in the study. Primary data was gathered to capture the opinion of board members on firm size characteristics that determine levels of CEO’S compensation using semi structured questionnaire. Secondary sources of data were used to gather information on financial performance from the financial statement of the listed organizations for 2016-2017 financial periods. Descriptive statistics, correlations, linear, multiple and stepwise regression were applied in analyzing and interpreting the data that was collected. The research revealed that there was significant and positive relationship between firm size and CEOs compensation. The findings of this study are of benefit to board members of organizations in identifying the performance measures that are important to consider when making decisions on CEO remuneration.},
 year = {2021}
}

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