How does directors’ remuneration affect SMEs’ performance?
| Autor: | Godfred Adjapong Afrifa, O. Adesina |
|---|---|
| Rok vydání: | 2018 |
| Předmět: |
050208 finance
business.industry 05 social sciences Accounting Sample (statistics) Discount points Affect (psychology) Stock exchange 0502 economics and business H1 Remuneration Small and medium-sized enterprises Business General Economics Econometrics and Finance 050203 business & management Finance Panel data |
| Zdroj: | Review of Accounting and Finance. 17:238-258 |
| ISSN: | 1475-7702 |
| DOI: | 10.1108/raf-12-2016-0199 |
| Popis: | Purpose The purpose of this paper is to empirically explain the relationship between the remuneration levels of a sample of listed small and medium enterprise (SME) directors and firm performance. The paper also investigates whether deviations from the optimal directors’ remuneration level reduces firm performance. Design/methodology/approach The study uses a panel data regression analysis of 802 AIM-listed SMEs over an eight-year period (2005-2012). Findings Using a non-linear approach, the results show that an optimum director’s remuneration level is calculated by comparing the benefits and costs of director’s remuneration. Hence, the paper not only shows how directors’ remuneration level affects firm performance but it also extends the stream of knowledge by indicating how a deviation from the optimal point influences UK-listed SME performances. Moreover, the results show that the effect of directors’ remuneration on firm performance is greater during a financial crisis period. Originality/value Compared with previous literature on directors’ remuneration, this paper focuses on AIM-listed SMEs, and the author’s finding of a concave relationship between directors’ remuneration level and performance of leads them to recommend that firms, especially SMEs, should endeavour to determine the optimal level of directors’ remuneration to maximise performance. |
| Databáze: | OpenAIRE |
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