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A Study On Corporate Performance And Executive Compensation: The Case Of Public Listed Companies In Malaysia

Meixi Gong


This study investigates the influence of corporate performance indicators namely, return on assets (ROA), earnings per share (EPS),
net profit and return on equity (ROE) on executives’ compensation, and also the moderating effect of independent ratio in the Malaysia listed
companies. Based on an analysis of a dataset comprising 100 companies in the fiscal year 2022, encompassing listed businesses in Bursa Malaysia, the results indicate that corporate performance has no significant relationship with executive compensation, but the independent director ratio has a significant moderating effect on the relationship between the corporate performance and executive compensation. This implies
that companies may increase executive compensation to incentivize executives to respond when earnings decline and to retain talent. Board
independence weakens the relationship between managerial compensation and performance and makes the role of independent directors ambiguous.


Corporate Performance, Executive compensation, Independent Director Ratio, Agency Theory

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DOI: http://dx.doi.org/10.18686/fm.v9i4.13090