Determinants of CEO Compensation in Malaysia

Nurul Fatihah Aishah  Azri; Ahmed Razman  Abdul Latiff; Mohammad Noor Hisham Osman; Siti Zaidah  Turmin

CEO compensation comprises of lucrative fees, salary, bonuses, and pension scheme. It is an important topic to be studied because evidence indicates that CEO compensation is positively associated with firm performance. Recently, the incidents of CEOs being paid excessively compared to services they do have been reported in both developed and developing countries. This motivates this study to examine the factors determining Malaysian CEOs compensation. The sample of this quantitative study is Top 80 Malaysia public listed companies based on market capitalization. The results of multiple regression analysis on data of 400 observations show that CEO compensation is negatively affected by the level of board of directors’ independence, but not affected by firm performance, CEO ownership and leverage. Additionally, we detect that CEOs with high compensation and low compensation are different in term of their firms’ board independence and leverage. We suggest future studies should at least examine the effect of CEO characteristics like tenure, education and family ownership on their compensation.

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In-Text Citation: (Azri et al., 2021)
To Cite this Article: Azri, N. F. A., Latiff, A. R. A., Osman, M. N. H., & Turmin, S. Z. (2021). Determinants of CEO Compensation in Malaysia. International Journal of Academic Research in Business and Social Sciences, 11(9), 1332–1344.

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Determinants of CEO Compensation in Malaysia

Nurul Fatihah Aishah Azri, Ahmed Razman Abdul Latiff, Mohammad Noor Hisham Osman, Siti Zaidah Turmin

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