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Effect of Company Performance on Sharia Commercial Bank Executive Compensation in Indonesia

Author

Listed:
  • Asyari, Mahfud

    (Universitas Islam Negeri Sunan Kalijaga Yogyakarta)

  • Nindya Maritsa, Firna Hayyu

    (Universitas Islam Indonesia Yogyakarta)

Abstract

After the disclosure of data from companies, research on executive compensation began to develop. Several studies on executive compensation in banking found that the determination of compensation is positively related to company performance.This research aims to determine the relationship between company performance and executive compensation of Islamic Commercial Bank’s in Indonesia. Company performance is proxied by Return on Assets (ROA).Thisstudy uses a sample of Islamic Commercial Banks because they have very good performance growth and currently only have a market share of 6.18% compared to the national financial market so they still have the potential to experience growth. Furthermore,sample used 14 Islamic commercial banks registered with the OJK during 2014-2019. The research method used panel data regression analysis. The results showed that the performance of Islamic Commercial Bank’s has an effect on executive compensation. Islamic Commercial Bank Executives have an obligation to improve company performance (ROA) because it affects the compensation received by the executive.

Suggested Citation

  • Asyari, Mahfud & Nindya Maritsa, Firna Hayyu, 2020. "Effect of Company Performance on Sharia Commercial Bank Executive Compensation in Indonesia," EkBis: Jurnal Ekonomi dan Bisnis, UIN Sunan Kalijaga Yogyakarta, vol. 4(2), pages 483-491, December.
    • Handle: RePEc:ris:ekbisj:1256
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    More about this item

    Keywords

    Company Performance; Executive Compensation; Sharia Commercial Bank;
    All these keywords.

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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