Corporate Compensations and Financial Performance of Multinational Firms in Nigeria

Matthew Babatunde Afolabi, Muyiwa Ezekiel Alade and Wale Henry Agbaje
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Matthew Babatunde Afolabi: Department of Accountancy, The Federal Polytechnic Ado Ekiti, Ekiti State Nigeria.
Muyiwa Ezekiel Alade: Department of Accounting, Adekunle Ajasin University Akungba Akoko, Nigeria.
Wale Henry Agbaje: Department of Accounting, Adekunle Ajasin University Akungba Akoko, Nigeria.

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Abstract: Corporate compensation is a crucial issue affecting the financial performance of business organizations around the world. Even with these worldwide developments, there are still obstacles to overcome in order to guarantee that corporate remuneration results in long-term financial success. This study therefore examined the effect of corporate compensation on the financial performance of multinational firms in Nigeria. Specifically, the study assessed the effect of salaries and wages on the financial performance of multinational firms in Nigeria, investigated the effect of bonus payments on the financial performance of multinational firms in Nigeria, and assessed the influence of corporate benefits on the financial performance of multinational firms in Nigeria. The study covered nine years, from 2013 to 2022. The study population consists of 42 multinational firms listed on the Nigerian Exchange Group (NGX) as of 31st December 2023. The study sampled 20 multinational firms out of 42 multinational firms using purposive sampling techniques. The study used secondary data sourced from sampled firms. Ordinary Least regression analysis was employed to analyze the data. The study found that salaries and wages have a significant negative effect on the financial performance and corporate benefits negatively also influence financial performance, while bonus payments have a positive effect on financial performance. This study concludes that salaries and wages and corporate benefits exert a significant negative impact on financial performance, while bonus payments have a positive effect. Empirically, this study provides evidence that excessive fixed compensation may hinder financial sustainability, while performance-driven incentives may contribute positively to profitability and growth. The research recommends that the managers of multinational firms should reassess their corporate benefits policies to ensure that they provide value to employees while maintaining financial sustainability.

Date: 2025-11-01
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Published in Asian Journal of Economics, Finance and Management , 2025, 7 (1), pp.1175-1191

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05343774

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