The role of Board Compensation Committee in CEO Compensation: Empirical Evidence from the from the Nigerian Financial Sector

This study investigates how the structural features of the Board Compensation Committee (BCC) impact the remuneration of Chief Executive Officers (CEO) of firms in the financial sector of the Nigerian economy. The structural features examined are the size, independence, gender diversity and level of activity of the BCC. The study sample is drawn from firms listed on the Nigerian Stock Exchange (NGX) between 2018 and 2022. Using dynamic panel regression techniques, the study finds a significant and inverse relationship between the gender diversity of the compensation committee and CEO compensation. In contrast, the relationships between CEO compensation and other compensation committee features such as size, independence and activity were found to be insignificant. The study is significant because it contributes empirical evidence from an emerging economy to the conversation about the role of critical board structures in delivering pay for performance by business organizations, especially in the financial sector.