Abstract:
The attention of the general public has been lately drawn to the subject of corporate governance due to its
obvious significance in the area of economic and financial wellbeing of organizations and that of the society at
large. Following a series of widespread corporate scandals that resulted in the collapse of previously prominent
companies the attention of various groups of stakeholders has been drawn towards the significance of corporate
governance. One of the specific issues of concern is the remuneration of the directors. Agitations regarding
excessive remuneration packages of directors have been added to the ongoing concern about the widening gap
between the remuneration of executives and ordinary employees, as well as their large termination payments
with perceived lack of justification. Since the beginning of the 21st century, there has been increased public
scrutiny of escalating levels of remuneration of directors across the globe. Thus, this study examined the effect
of directors’ remuneration on corporate financial performance. The study employed ex-post facto research
design using panel data for the periods under study (2009-2018). The scope of the study comprised of the three
hotels listed in the Nigerian Stock Exchange as at December 2018. Necessary data were obtained from the
audited financial reports of the selected companies. The results of the regression analysis revealed the existence of a positive significant relationship between directors’ remuneration and corporate financial performance. This study recommends that corporate board members should be well remunerated, this will go a long way in boosting their moral for effective discharge of their duties.
