EXECUTIVE COMPENSATION AND ORGANISATIONAL PERFORMANCE IN FOOD, BEVERAGE AND TOBACCO INDUSTRY IN NIGERIA
No Thumbnail Available
Date
2017
Journal Title
Journal ISSN
Volume Title
Publisher
Faculty of Management Sciences, University of Ilorin, Ilorin, Nigeria
Abstract
This study identified the factors that influenced executive compensation in the
selected fims within the Food, Beverage and Tobacco industry in Nigeria and
examined factors that contributed organizational performance in the industry. It also
assessed the influence of executive compensation on organizational performance in
the industry. These were with the view to providing information on how executive
compensation affected organisational performance.
Primary and secondary data were used for this study. Primary data were collected
through the administration of 56 copies of questionnaire to executives of eight
purposively selected firms out of 30 quoted companies in the industry during the
period of 2009-2013. The eight quoted companies were chosen due to their
impressive growth in the food, beverage and tobacco industry with several years of
operation in Nigeria. Stratified random sampling technique was used in selecting the
56 executives from the selected companies. The top executive, middle level and
lower level staff were used for stratification. Secondary data were sourced from
Nigeria Stock Exchange Factbook, Annual Reports and Financial Statements of
selected firms, variables such as asset utilization, net profit margin, return on capital
employed, and directors' emolument. Data collected were analyzed using binary
logistic regression and two -stage least squares regression analysis. The results
showed that five factors influenced executive compensation, out of whch only two
were significant in the selected firms within the food, beverage and tobacco industry
in Nigeria they are: years of experience (t= 2.93 1, p<0.05), take home packages (t =
2.638; p<0.05) while age (t = 0.916, p>0.05), qualification (t = 1.208, p>0.05) and
department of works (1 = 1482, p>0.05) were not significant. The results also
showed that the factors that led to organisational performance in the industry
included asset utilization (t= 7.238, p<0.01) and returns on capital (= 2.391, p<0.05).
Finally, the results showed that executive compensation (measured with director's
emolument) had no significant influence on organisational performance (t=-1.245,
p> 0.05). The study concluded that executive compensation in the food, beverage
and tobacco industry had substantial effect on organisational profitability.
Description
Keywords
Citation
Akindele, I.T., Ologunde, A.O. & Ibikunle, T.D. (2017): Executive compensation and organizational performance in food, beverage and tobacco industry in Nigeria. Ilorin Journal of Management Sciences. 4 (1); 50-66, Published by Faculty of Management Sciences, University of Ilorin.