Abstract
This investigates the effect of corporate characteristics on share base payment of financial service industry in Nigeria. Objective of the study is to if internal factors affects share base payments of corporate organizations in Nigeria. We analyzed five commercial banks and five insurance firms that are quoted on the floor of Nigerian Stock Exchange. Technique adopted for sampling adopted is convenience sampling. As the nature of data is panel therefore, pooled regression, fixed and random effect tests are run. Random effect results are focused after applying Hausman’s test. From the fixed effect model, tangibility, risk, management efficiency, debt equity ratio, corporate governance and cost of capital have negative but insignificant effects while return on investment, liquidity and firm size have positive and insignificant effect on share base payment. We conclude that corporate characteristics does not significantly influence share base payment of the selected financial service firms. We therefore recommend that the use of share base payment should be integrated with the corporate structure such as ownership structure, capital structure and others.
Highlights
The traditional finance paradigm, theory and teaching put the shareholders wealth maximization as the primary goal of corporate management
Share based payment issued by International Accounting Standard Board is regulated by International Financial Reporting Standard
An example brought by Alexander et al (2008) is used to illustrate this kind of transaction and this is when top executives or/and employees receive as part of remuneration, shares, options or other equity instruments. This can be received through different kind of compensation plans including, employee stock option plans (ESPs), and employee stock purchase plans (ESPPs), restricted stock plans, and employee stock ownership plans (ESOPs)
Summary
The traditional finance paradigm, theory and teaching put the shareholders wealth maximization as the primary goal of corporate management. Apart from maximizing shareholders wealth as finance theory formulated, the corporate organization has obligations such as payment to employees and creditors. These can be raid in cash or share base payment. Share based payment issued by International Accounting Standard Board is regulated by International Financial Reporting Standard This standard addresses payments and compensation plans which have been more and more accepted and adopted. The importance of looking at the determinants is that it shows the users including owners and managers a way in which share based payment is used as an efficient tool for motivation and monitoring, it is interesting to investigate how corporate characteristics are associated to share based payment. Section four deals with the data analysis and presentation and the fifth section contain the conclusion and recommendations from the findings
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