The Relationship between Executive Remuneration and Organizations’ Efficiency: An Evidence from the Financial Sector of Pakistan

Abstract

The salary structure has been a major worry for firms in recent years. This study investigated the relationship between remuneration trends for executives and organizational effectiveness. Between 2005 and 2019, we obtained secondary data from the annual reports of 25 banks. Using STATA, we assessed the hypotheses by analyzing the data. Using basic least squares regression techniques and Granger's causality test, we determined the relationship and causality between variables by analyzing the data. The results reveal that board compensation has a significant impact on the success of a firm. The study provides regulators with a comprehensive methodology for calculating CEO compensation for encouraging research and development within the organization.