ENHANCING FINANCIAL PERFORMANCE OF QUOTED FIRMS IN NIGERIA THROUGH REMUNERATION COMMITTEE ATTRIBUTES

Abstract

The high remuneration received by directors of corporate bodies have been questioned as to if such remuneration is justified by the underlying economic performance of the company in question. As a result, remuneration committee was established to harmonize the take home of directors in order to improve the profitability of firms in Nigeria. In line with the above assertion, this study examined how remuneration committee attributes can enhance performance of selected non-financial firms in Nigeria. The study adopted ex-post facto and cross sectional research design. The study relies on secondary data derived from various non-financial firms’ financial statements to determine and measure the attributes of remuneration committee members, applying an all-inclusive multivariate analysis. Samples of 40 selected non-financial firms quoted in Nigeria Exchange limited were used for the period of twelve years spanning 2013 to 2024. Five (5) specific objectives were formulated and its hypothesis were subjected to some preliminary data tests such as descriptive statistics, Pearson correlation analysis and Variance Inflation Factor. The formulated hypotheses were tested and analyzed using panel regression analysis. The empirical analyses using a total of 480 firm year observations showed that remuneration committee independence and expertise documented a positive and significant effect on profitability of quoted non-financial firms in Nigeria which was statistically significant at 5% level of significance respectively while remuneration committee size and gender diversity showed a negative but non-significant effect on profitability of quoted firms in Nigeria. Following on the significant findings above, the study recommended among other things that non-financial firms’ management should ensure that their remuneration committee is constituted with expert and independent members to give a seasoned advice without bias on ways to improve firm profitability. This will promote transparency and accountability and enable the remuneration committee be independent and make quality decision that will boost profit without unnecessary interference.