Executive Directors’ Emoluments and Financial Performance of Listed Deposit Money Banks in Nigeria

Financial performance remains a key concern to investors, shareholders and regulators because it controls the stability, growth and sustainability of deposit money banks. There are still questions about whether executive directors' salaries improve banks' financial performance, even after the Central Bank of Nigeria implemented measures to bolster the banking industry. This research looked at how executive directors' salaries affected Nigerian deposit money institutions' bottom lines. Using secondary data from the published annual reports and audited financial statements of fifteen (15) deposit money banks listed on the Nigerian Exchange Group during a ten-year period (2016–2025), the study used ex post facto research approach. Panel regression, correlation analysis, and descriptive statistics were used to analyze the data, utilizing both random and fixed effects models. The results showed that executive director compensation had a statistically significant impact on revenue growth (Adj R² = 0.89, F-statistic = 74.16, p < 0.05) and return on equity (Adj R² = 0.78, F-statistic = 178.46, p < 0.05). In particular, revenue growth and return on equity were positively and significantly impacted by directors' fees, whereas short-term benefits had a positive but statistically negligible impact. The study found that executive directors' compensation improves deposit money banks' financial performance, albeit the impact varies according to the performance metrics. It suggested that in order to increase management effectiveness, enhance shareholder value, and foster sustainable financial success, compensation committees should regularly examine executive compensation packages and implement competitive and performance-based compensation systems.