Abstract
The study analyses the impact of bank performance, and CEO ethics on compensation for large listed banks in Nigeria from 2006-2016. The study employs alternative measures of bank performance and a self-constructed CEO ethics index to analyze the determinants of CEO pay. The study shows that bank performance does not influence CEO cash compensation while the CEO’s ethics negatively influence CEO compensation. The study reconciles the mixed evidence in agency literature on tenure and pay association by showing that increased tenure for ethical CEOs adversely affects CEO pay. On the contrary, increased tenure for unethical CEOs positively affects compensation, which suggests that prolonged tenure for unethical CEOs contributes to entrenchment and excessive compensation. The study findings show that manager ownership concentration, leverage, and board size are negatively related to CEO compensation. Overall the study recommends performance-based compensation, tenure limits, and ethical awareness to strengthen corporate governance in the banking industry.
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