The Role of Financial Compensation Oversight Committees in Improving the Financial Performance Governance of Saudi Banks

Ibrahim Ahmed Elamin Eltahir, Mozamil Awad Taha, Nasareldeen Hamed Ahmed Alnor (), Salih Hamid Adam and Eltayeb Hamid Edres Musa
Additional contact information
Ibrahim Ahmed Elamin Eltahir: Department of Business Administration, Jouf University, Sakakah 72311, Saudi Arabia
Mozamil Awad Taha: Accounting Department, College of Business Administration, Taif University, Taif 26311, Saudi Arabia
Nasareldeen Hamed Ahmed Alnor: Accounting Department, College of Business, Jouf University, Sakakah 72311, Saudi Arabia
Salih Hamid Adam: Accounting Department, College of Business Administration, Taif University, Taif 26311, Saudi Arabia
Eltayeb Hamid Edres Musa: Department of Accounting, College of Administrative Sciences, Shaqra University, Shaqra 15551, Saudi Arabia

JRFM, 2025, vol. 18, issue 9, 1-14

Abstract: This study looks at how oversight committees affect CEO compensation governance and how this affects publicly traded banks’ financial performance. It specifically looks at how compensation committee mandates and structural traits affect how CEO compensation is matched to company performance results. The research employs a panel dataset of sample firms across the study period, combining financial performance metrics like return on equity (ROE) and return on assets (ROA). It draws on agency theory and corporate governance theories. In addition to firm-level controls, the research takes into account committee-level factors such independence, experience, frequency of meetings, and ownership. The findings obtained through panel regression methods and testing show that improved pay-performance sensitivity and improved financial performance do not correlate with committee influence, independence, or financial expertise. The importance of empowered oversight committees in reducing interagency conflicts of interest and fostering efficient governance is demonstrated by these findings. By emphasizing how internal governance frameworks can be used to produce long-term organizational goals, the study adds to the discussion surrounding executive compensation.

Keywords: executive compensation; oversight committee; corporate governance; financial performance; committee influence; performance; agency theory (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2025
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/1911-8074/18/9/514/pdf (application/pdf)
https://www.mdpi.com/1911-8074/18/9/514/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jjrfmx:v:18:y:2025:i:9:p:514-:d:1750190

Access Statistics for this article

JRFM is currently edited by Ms. Chelthy Cheng

More articles in JRFM from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().