Regression analysis reveals that governance disclosures moderate the link between executive directors’ remuneration and firm performance, highlighting key trade-offs.
Key Points
A significant positive association exists between accounting-based performance and remuneration proxies, indicating effective incentives.
Excluding COVID-19 years, market-based performance metrics show significant relationships only under certain conditions, suggesting unique challenges.
Governance disclosures negatively moderate the remuneration-performance relationship, especially for short-term incentives, pointing to potential inefficiencies.
The study integrates concepts around bonding and monitoring costs, offering insights applicable to developing economies with distinct governance dynamics.