Firm Characteristics and Employees’ Compensation.

ABSTRACT

The study examined the effect of firm characteristics on employees’ compensation. The aim of the study is to examine the effect of ownership structure, corporate tax and firm leverage on employees’ compensation and controlling for firm size and firm age.

This study used a sample of thirty-five (35) quoted non-financial companies in the Nigerian Stock Exchange that have consistently published their audited annual financial report for the period of 2012 to 2019. The data collected are analysed using descriptive statistics, correlation analysis and panel regression approach. The results from the random effect regression show that ownership structure exerts an insignificant positive effect on employees’ compensation at p> 0.05, corporate tax exerts an insignificant negative effect on employees’ compensation at p > 0.05, firm leverage exerts a significant positive effect on employees’ compensation at 1% level of significance, firm size had an insignificant negative effect on employees’ compensation at p> 0.05 and firm age had an insignificant negative relationship with employees’ compensation at p> 0.05.

• The study recommend that investors like the debenture holders were happyto commit more investment in quoted non-financial companies by receiving regular fixed return on fund borrowed and increase employees’ compensation. The study therefore suggested that further empirical study should be conducted on the area of firm characteristics on employees’ compensation by sampling the entire quoted firms in the Nigerian Stock Exchange.