Asymmetric information phenomenon in the link between CEO pay and firm performance: An innovative approach
Abstract
Purpose
The purpose of this paper is to examine the asymmetric behavior between CEO pay and firm performance in Nigeria.
Design/methodology/approach
The study adopts a two-step dynamic panel generalized method of moments (GMM) to reveal asymmetric responses of CEO pay to positive and negative shocks in firm performance.
Findings
The research outcomes of a two-step dynamic panel GMM) adopted reveal asymmetric responses of CEO pay to positive and negative shocks in firm performance. This implies that CEOs are handsomely compensated for good performance, but not punished for poor performance.
Originality/value
The study, therefore, suggests that CEO pay fails to serve as an internal corporate governance mechanism to alleviate agency problem in Nigeria’s listed firms.
Keywords
Acknowledgements
The author of this paper has not made their research data set openly available. Any enquiries regarding the data set can be directed to the corresponding author.
Citation
Olaniyi, C. (2019), "Asymmetric information phenomenon in the link between CEO pay and firm performance: An innovative approach", Journal of Economic Studies, Vol. 46 No. 2, pp. 306-323. https://doi.org/10.1108/JES-11-2017-0319
Publisher
:Emerald Publishing Limited
Copyright © 2019, Emerald Publishing Limited