Relationship between CEO remuneration and firm performance: evidence from Pakistan

Abstract

This study explores the effects of CEO remuneration on performance of listed firms from chemical sector of Pakistan. This study used TobinQ and return on assets for proxies of firm performance. This study used OLS as estimation method and Hausman test suggest that fixed effect is suitable for sample data firms from chemical sector of Pakistan. This study used data 2011-2020 of 15 listed chemical firms belongs to Pakistan. Findings suggest positive impact of CEO remuneration on firm performance of listed chemical firms from Pakistan. These findings indicate that highly paid CEO of chemical industry are more competent, efficient and talented. These results support the assumptions of agency theory. Policymakers, managers, and investors in Pakistan's chemical industry can learn from this study.