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

Mahfud Asyari () and Firna Hayyu Nindya Maritsa
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Mahfud Asyari: Universitas Islam Negeri Sunan Kalijaga Yogyakarta
Firna Hayyu Nindya Maritsa: Universitas Islam Indonesia Yogyakarta

EkBis: Jurnal Ekonomi dan Bisnis, 2020, vol. 4, issue 2, 483-491

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.

Keywords: Company Performance; Executive Compensation; Sharia Commercial Bank (search for similar items in EconPapers)
JEL-codes: E58 G21 G34 (search for similar items in EconPapers)
Date: 2020
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